‘INSTC to boost Indian shipping sector in FY’16 ’

Sai Nikesh | The Dollar Business

India’s shipping sector is expected to maintain negative-to-stable outlook in the current financial year, with favourable situation for tankers segment and challenges in case of offshore, dry bulk and containers segments, said a report on Monday. According to the report by India Ratings & Research, the dry bulk and containers segments are likely to get impacted due to weak global trade growth and offshore segment is expected to get affected due to low crude oil prices globally. However, the tankers segment will likely remain an exceptional case due to its better demand-supply situation, it added. Speaking to The Dollar Business, Shankar Shinde, vice-chairman, Federation of Freight Forwarders’ Associations in India (FFFAI) and Managing Director, Global Express Multilogistics Pvt. Ltd., said, “Weak performance of Exim trade, which holds major responsibility of the growth of shipping sector, has affected growth of Indian shipping sector over the last two-three months period.” Despite high capacity, shipping sector witnessed weak trend in ease of moving logistics and freight moving rates also declined by 50% in the last two-three months, he added. Increase of transport cost is resulting in delay of export process and the main reason behind this is the port congestion, which is due to lack of proper infrastructure, which is the key factor for export growth, he noted. However, the government’s initiative- International North South Transport Corridor (INSTC), a multi modal transportation system, is expected to bring positive results for Indian shipping sector by reducing transit dual-time by 40% and costs by 30%. INSTC offers Indian shipping sector an enhanced shipping linkages with countries like Iran, Russia and the proposed INSTC route via Bandar Abbas in Iran to Russia and other CIS Countries in transit through Iran, is expected to offer Indian exporters, the best route with optimal transit costs, he noted. He further opined that global trade situation may not have any significant impact on Indian shipping sector, however, occurrence of any such impact can be handled through INSTC support.      

August 03, 2015 | 7:20 pm IST.