FIEO: India needs shipping line of global repute
Federation of Indian Export Organisations (FIEO) president Dr A Sakthivel, during his pre-Budget meeting with Finance Minister Niramala Sitharaman, highlighted key challenges affecting trade and services.
December 17, 2021: Federation of Indian Export Organisations (FIEO) president Dr A Sakthivel, during his pre-Budget meeting with Finance Minister Niramala Sitharaman, highlighted key challenges affecting trade and services.
Developing an Indian shipping line of global repute
The other challenge faced by the export sector is the rising freight cost and dependence on global shipping companies. "India’s outward remittance on account of transport services is increasing year after year. We remitted around $65 billion as transport services in 2020, and looking into the abnormal increases in freight in 2021, the figure is likely to cross $100 billion. When we are looking at increasing our international trade to $2 trillion in an economy of $5 trillion, the outgo on transport services will increase to $150-200 billion. Since the Shipping Corporation of India is being disinvested, we need to encourage large Indian entities to build an Indian shipping line of global repute. Such shipping lines, even if it gets 25 percent of the total business, can save $30-$40 billion annually, and will also reduce our dependence on foreign shipping lines and their dictates. The tax advantage availed by shipping lines in some countries may be considered to encourage them to register such ships in India."
Fiscal and tax support to address logistics challenges
"Export sector is facing an acute shortage of containers as we are dependent on imported containers though coastal shipping is gradually gaining traction in the country," a statement from FIEO said. "Container manufacturing requires a special kind of steel which provides a competitive edge to China which manufactures over 80 percent of global containers. We need to encourage domestic manufacturing of containers by providing fiscal benefits, which is required as we are looking to $1 trillion exports in the next five years."
Sakthivel also raised other issues including a double tax deduction scheme for internationalisation allowing exporters to deduct against their taxable income twice the qualifying expenses incurred for approved overseas activities including market preparation, market exploration, market promotion and market presence.
Maritime India Vision 2030 - investment plan of Rs 3.5 lakh crore
Union Minister for Ports, Shipping, Waterways Sarbananda Sonowal said the ministry has prepared a blueprint - Maritime India Vision 2030 (MIV 2030) - to ensure coordinated and accelerated growth of India’s maritime sector in the next decade with the objective of propelling India to the forefront of the global maritime sector.
"MIV 2030 has identified initiatives such as developing world-class mega ports, trans-shipment hubs and infrastructure modernisation of ports," Sonowal said.
These initiatives would help in lowering overall operational costs of ports, reducing turnaround time for vessels, increasing efficiency and throughput, providing ability to handle larger ships and developing Indian ports' strategic importance in the South Asian region.
MIV 2030 envisions an overall investment of Rs 3-3.5 lakh crore across ports, shipping, and inland waterways. "This vision roadmap is estimated to help unlock Rs 20,000+ crore worth of potential annual revenue for Indian ports. Further, it is expected to create an additional 20 lakh plus jobs (direct and indirect) in the Indian maritime sector," Sonowal added.
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