Shipping Sector

Shipping Sector

According to the Ministry of Shipping, around 95% of India’s trading by volume and 70% by value is done through maritime transport

India has 12 major and 200+ notified minor and intermediate ports.

Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country.

The Indian ports and shipping industry play a vital role in sustaining growth in the country’s trade and commerce. India is the sixteenth-largest maritime country in the world with a coastline of 7,516.6 kms.

The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects.

It has also facilitated a 10-year tax holiday to enterprises that develop, maintain, and operate ports, inland waterways and inland ports.

Jawaharlal Nehru Port Trust (JNPT) Special Economic Zone (SEZ) became the first of its kind operational port- based multi-product SEZ in India.

The capacity of major ports, which was 871.5 million Tonnes Per Annum (MTPA) at the end of March 2014, has increased to 1617.39 MTPA by the end of March 2023.

To meet the ever-increasing trade requirements, the expansion of port capacity has been accorded the highest priority by the government through the implementation of well-conceived infrastructure development projects.

For streamlining the port compliances and for reducing the Turnaround Time for (TAT) for vessels, long strides have been taken at the major ports towards the digitisation of key EXIM processes.

The Port Community System (PCS) has digitised processes such as Electronic Invoice (e-Invoice), Electronic Payment (e-Payment) and Electronic Delivery Order (e- DO) for the physical release of cargo by custodians, in addition to the processes of generating electronic Bill of Lading (e-BL) and Letter of Credit (LC).

Further, the Radio Frequency Identification Device (RFID) solution has been implemented at all major ports to enable seamless movement of traffic across port gates, including substantial reductions in documentation checks.

Additionally, the process to bootstrap PCS into National Logistics Portal-Marine (NLP-Marine) is already under way which will act as a Unified Digital Platform for all maritime stakeholders.

Using navigable waterways to their full potential for inland water transport

There is a lot of unrealized potential for using inland water transportation to move both people and products.

India has a large endowment of rivers, canals, and other waterways. The total navigable length of waterways in India is around 14,850 kilometres.

Under the National Waterways Act 2016, 106 new waterways have been declared as National Waterways (NWs), taking the total number of NWs in the country to 111.

Further, to promote the use of inland waterways, waterway usage charges levied by the Inland Waterways Authority of India (IWAI) on vessels moving on NWs were waived in July 2020, initially for a period of three years.

The Inland Vessels Bill 2021, which replaced the over 100-year-old Inland Vessels Act, 1917 was passed by the Parliament in August 2021. This will usher in a new era for the inland water transport sector and fulfil the vision to utilize the potential of a multi-modal transport ecosystem while making the legislative framework user- friendly and promoting ease of doing business.

Inland Vessels act 2021

The Inland Vessels Act of 1917, which had undergone several amendments, had provisions for the restrictive movement of mechanically propelled vessels and non- uniform standards and regulations across different states. The Inland Vessels Act 2021, which replaced the erstwhile Act, aims to bring uniformity in the application of the law relating to inland waterways and navigation within the country. Some salient features of the Act include:

• State governments may declare by notification any inland water area as a “Zone” depending on the maximum significant wave height criteria as prescribed in the Act. Any mechanically propelled vessel would have to obtain a certificate, which would indicate the zone in which the vessel is to be operated.

• A central database of inland vessels would be maintained by the government.

• The standards for qualification, training, training institutes, examination, and grant of certificate of competency would be prescribed by the Central Government.

• Standards for prevention of environmental pollution.

• Constitution of a Development Fund by the State Government to be utilised for meeting emergency preparedness, containment of pollution, removal of unidentified wrecks or obstruction, boosting development works of inland water navigation, etc.

Overall, the new Act would lead to uniformity of rules across states ensuring unhindered and safe movement of vessels within and across states. This is likely to promote inland water transport as a potential mode for large- scale movement of cargo as well as passengers across the country owing to its relative cost effectiveness.