The focus has also expanded to compete with the global maritime industry to make Indian shipping industry an owners’ market as against present charterers’ market.
COVID-19 Pandemic has disrupted the world economy including the maritime sector globally. Neptune Declaration initiated at a global level in order to streamline and categorize seafarers as “frontline workers” to ensure their well-being. In India, this has given rise to some serious discussions and deliberations on setting up of seafarer support fund to be included in the present (2021-22) budget. With huge focus on the maritime and shipping Industry by the present government, how Indian maritime, shipping and trading sector will cope through and post the Pandemic has been pertinently relevant and needs deeper evaluation including its growth in the immediate future. In conversation with Financial Express Online, Gautam Bhatikar, Partner, Phoenix Legal talked about these issues faced by the maritime sector and its future.
The Neptune declaration was initiated by Global Maritime Forum for universally categorizing seafarers as “key frontline workers” given the nature of their service to the trade and commerce industry. Unlike many other regularized sectors, the seafarers unfortunately do not have scheduled shifts to ensure their holistic well-being. The Neptune declaration takes into consideration the need for shift timings for the maritime crew in line with their agenda of mental and physical well-being and health of this cohort including vaccination.
The Covid -19 pandemic has disrupted and caused a unique crisis at sea with thousands of seafarers being stranded aboard the ship, even post expiry of their employment contracts. For the Neptune declaration to bear the suggested fruits of change, at a global level, the aviation and the shipping industries will have to work cohesively with governments to ensure that airlift activities are initiated between major crew changing hubs and the seafaring nations. In my view, the Neptune declaration is a welcome step in enabling long term health and safety of the seafarers, who are an integral part of an industry which handles logistics of over 90% of international trade.
What is your take on the budget from the POV of the maritime and shipping industry?
Over the last few years, in our endeavour to make the Indian maritime sector “atmanirbhar”, there have been concerted attempts by our Government to shift gears with respect to development of ports and expansion of shipping connectivity to our hinterlands in achieving the 5 trillion economy mark. The focus has also expanded to compete with the global maritime industry to make Indian shipping industry an owners’ market as against present charterers’ market.
Recent budget has further provides a boost to this aspiration, amongst others, by including development of 7 new port projects through PPP (public-private partnerships). I am also positive of the scheme that has been introduced for flagging the Indian merchant ships and providing subsidies in global tenders. This provision will accentuate the Indian position in the global scenario whilst generating additional employment opportunities for the youth in the shipping sector from a long term perspective.
With India acceding to the HK International Convention on recycling of ships and the enactment of Recycling of Ships Act, 2019, efforts are being made to bring European and Japanese ships for recycling, will further boost the Indian ship recycling industry and the capacity is forecasted to double by 2024. All this will generate a growth outlook and provide a positive momentum to employment opportunities in the coming years.
MUI wants a seafarer support fund in the Budget. Do you think the Govt should go ahead with this?
While the ask is fairly reasonable and can be an extension of the multiple initiatives taken by the Government to raise the bar around self-reliance for the shipping industry, in light of the changing economic scenario due to Covid-19, the seafarer support fund may not seem a plausible option in the immediate short term. However, in the near future, the Government can consider the same and lay another progressive foundational stone for the seafarer community.
How is the Indian maritime industry doing in general and what do you foresee in future?
India is on a growth trajectory when it comes to the shipping and maritime industry. Optimistically speaking, the post Covid-19 slack is not for long and the boost impetus provided by the Government in the form of subsidies and capital investment for this sector shall bear fruits in the years to come. Most of our major ports are notably termed as the busiest in the world. The future is bright because of the flexible nature and the focused efforts that are taken for the upliftment of the maritime industry. Development of inland waterways will be another impressive milestone to enhance trade and simultaneously reduce logistics cost, thus providing a competitive pricing advantage at the global marketplace.
This will not only provide growth and push in the maritime industry but also to other industries connected to this sector like banking and insurance to name some. One aspect needs to be considered – is the regulatory and taxation framework to make India a shipowner’s market. In my view, these have been a hurdle to India’s maritime growth potential. This may not happen overnight, but a considered efforts need to be made in overcoming these hurdles.
Post pandemic what changes are you witnessing in the maritime industry?
The demand for shipping is a derived demand, which is directly influenced by the manufacturing and international trade. At the initial stage of the Covid-19 lock-down, the shipping industry experienced a slowdown. This was a global scenario. There were some preliminary disruptions and delays in the loading and unloading of goods due to the safety protocols and regulations that were put in place, globally. Thankfully, it seems now, we can safely say that things are now getting back on track and I foresee an upward spiral in the near future.
How is the Indian maritime industry doing in general and what do you foresee in future?
Presently, the Indian shipping industry is reviving from the impact of the COVID 19 pandemic. One such important step is the Merchant Shipping Bill, 2020 that has been promulgated, with the primary aim of promoting the growth of the Indian shipping industry by incorporating the best practices adopted by other advanced countries like the U.S., Japan, U.K., Singapore, and Australia. The Bill aims to offer increased opportunities for foreign investment and provide a better foundation to domestic investment climate in the maritime industry. I have a very optimistic feeling and belief that the Indian maritime industry is definitely slated for a brighter future.
Source: Financial Express
