Indian companies allowed to buy and flag ships abroad
"This will enable Indian companies to have access to cheaper sources of funds abroad to acquire additional tonnage while not having to set up multiple enterprises abroad to acquire and maintain such tonnage," the Shipping Ministry said in a statement here Sunday.
India-based shipping companies register their ships abroad without actually opening their registered office or a subsidiary company there, the ministry said.
"This decision is aimed at encouraging Indian Shipping companies to have their registered offices in India itself while allowing them to acquire further tonnage without forming subsidiaries out of India to own foreign flag vessels," the statement added.
According to the shipping ministry, Indian-flagged tonnage has been stagnating for quite some time at around 10.50 million gross tonnes (MGT).
The exchequer is expected to gain from this policy decision through tax on revenues earned from this additional tonnage.
While the additional tonnage that can be acquired and flagged abroad is limited to the tonnage already registered in India, it is also subject to employing a certain proportion of Indian crew.
This condition would help create additional employment opportunities for Indian seafarers, the ministry said.
Currently around 110,000 Indian seafarers work in various positions on board around 3,500 cargo vessels across the globe, according to the Maritime Association of Shipowners, Shipping Companies/Agents (MASSA).
They contribute foreign exchange worth over $1.2 billion per annum to the country's exchequer.
With India yet to ratify the International Labour Organization-adopted Maritime Labour Convention (MLC)-2006, that provides for rights and safety standards for one million seafarers worldwide, Indian seafarers face inspections at international ports causing time and cost delays, as also affecting their employability.
"The non-ratification of MLC-2006 - which came into effect Aug 20, 2013 - has also put Indian seafarers to great disadvantage as they are now not the primary choice of overseas shippers," Captain Shiv Halbe, chairman of the Mumbai-based MASSA, told reporters here Friday.
(Posted on 27-07-2014)