Indian industry proposes domestic shipping line for stable freight

Indian industry has proposed the establishment of an Indian shipping line with global repute, so that current shipping lines cannot exert undue pressure during times of crisis. The recent surge in freight charges following the Red Sea crisis has alarmed Indian industries and exporters. They presented this proposal to Piyush Goyal, the minister of textiles and commerce and industry, during a Board of Trade meeting held on Tuesday. 

The suggestion for an Indian shipping line was made in response to the skyrocketing shipping charges resulting from the ongoing Red Sea crisis. This situation has adversely affected India's trade with Europe, the US East Coast, and parts of West Asia and Africa. Indian exporters have previously made this suggestion several times, but it has become more critical due to the unprecedented crisis in the global logistics sector. 

Currently, Indian exporters are dependent on foreign shipping lines, which indiscriminately increase freight charges at any opportunity. Amidst the current crisis, freight rates have risen not only for the Red Sea route or the detour via the Cape of Good Hope but for all routes. The industry has informed the government about this crisis. 

In the meeting, the Federation of Indian Exporters Organisation (FIEO) also emphasised the need to develop an Indian shipping line. It highlighted that the government has initiated steps to facilitate container manufacturing in the country, aiming for self-reliance. 

The Indian government has set a goal to increase exports to $1 trillion by 2030, which will boost the demand for shipping services for the transport of increased consignments. It is imperative to develop a large-sized shipping line in India, foreseeing a thriving logistics market in the coming decades. Exporters expect that with an Indian shipping line, global shipping liners will not be able to arbitrarily increase freight charges. An Indian shipping line could help contain soaring freight charges during times of crisis in vessel movement. 

The presentation to Goyal suggested that Indian private players could be engaged to develop such shipping lines, which would also reduce the influence exerted by foreign shipping lines, particularly on Indian MSMEs. 

There are estimates that if Houthi attacks continue and shipping movement remains disrupted, Indian exports could decline by $30 billion. Shipping charges have almost doubled on many routes, and various steep surcharges are being applied, such as peak season surcharges, Red Sea surcharges, and contingency surcharges, as reported by exporters in the meeting. 

Fibre2Fashion News Desk (KUL)