Exporters want government to develop an India-based shipping line

India’s exporters want the government to create an indigenous shipping line of international standard, which would cut shipping expenses and boost the nation’s export prospects.

If an Indian shipping line ferries a share of around 25 per cent, it would save around $50 billion annually and also minimise the arm twisting that small and medium businesses have to face while operating on foreign shipping lines, Ashwani Kumar, president of Federation of Indian Export Organisations (FIEO), informed at a pre-budget meeting that Finance Minister Nirmala Sitharaman held with the trade and services sector representatives.

Data from FIEO shows that India paid $109 billion as transport service charge in 2020 and the amount could scale $200 billion by 2030 given the steady rise in volume of exports. The cost factor apart, an India-based shipping line could tackle the problem of international vessels cutting out the country upon getting larger cargo assignments in other parts, especially in Southeast Asia.

The government of India has reportedly been considering the idea of an indigenous shipping line for a while but details about the project are to be officially disclosed.

At the meeting, the FIEO, which is the central body for the promotion of exports across sectors, also sought an increase in the annual marketing budget under the Market Access Initiative (MAI) from Rs 200 crore to Rs 500 crore, and highlighted the need to extend the Interest Equalisation Scheme that is due for expiry by the month-end. The apex exports body wanted an escalation in interest subsidy from 3 per cent to 5 per cent, too.

The National Association of Software and Services Companies (Nasscom), the Federation of Hotel and Restaurant Association of India (FHRAI), and regional chambers of commerce and industry also participated in the meeting, as did export promotion councils for marine, gems, jewellery and leather.