For the first time in history, Indian shipping tonnage has crossed the 9 million gross tonne (GT) mark. But, the deteriorating age profile of Indian fleet and its declining share in the carriage of country's overseas trade, even as the trade is on an upswing, is a cause of concern, according to Indian National Shipowners' Association (INSA).
In the beginning of this year the Indian fleet comprised 839 ships with 9.03 million GT.
The growth of the fleet was sluggish during 2006-07 with 787 ships (8.59 million GT) as on March 31, 2007 as against 739 ships (8.46 million GT) a year ago.
It is estimated that by 2012, to maintain the present share of around 14 per cent by Indian flag ships in the carriage of the country's overseas trade, the tonnage required will be around 20 million GT.
With 4 million GT to be scrapped during this period, a net addition of 15 million GT involving an investment of around $20 billion is required to meet this target, Mr S. Hajara, President, INSA, said in the association's 2007 annual report.
As on October last the average age of Indian fleet was 18 years. The age profile of the fleet in terms of GT shows that over 42 per cent of overseas fleet (3.45 million GT) was over 20 years, while another 14.2 per cent was between 15 and 19 years.
The outlook for the fleet strength remains positive with the continuing firm trends in the freight market and creation of funds through mandatory provision transfer of 20 per cent profits to the tonnage tax reserve for acquisition of ships.
The tonnage tax reserve created by the Indian shipping companies is around Rs 2,000 crore. With the fleet acquisition plans by Indian companies, the fleet will cross 10 million GT shortly.
However, there has been an increasing trend of ships being acquired by subsidiaries of Indian companies abroad, the annual report says.
The share of Indian fleet in the carriage of the country’s overseas trade declined significantly in the last seven years.
In 1990-91, the Indian fleet’s share was as high as 35.5 per cent of the overseas trade, and the balance was carried by foreign vessels.
The percentage declined to 31.5 per cent in 1999-2000, and the next year reduced significantly to 22.4 per cent. Currently, it is around 14 per cent.
In the beginning of this year the Indian fleet comprised 839 ships with 9.03 million GT.
The growth of the fleet was sluggish during 2006-07 with 787 ships (8.59 million GT) as on March 31, 2007 as against 739 ships (8.46 million GT) a year ago.
It is estimated that by 2012, to maintain the present share of around 14 per cent by Indian flag ships in the carriage of the country's overseas trade, the tonnage required will be around 20 million GT.
With 4 million GT to be scrapped during this period, a net addition of 15 million GT involving an investment of around $20 billion is required to meet this target, Mr S. Hajara, President, INSA, said in the association's 2007 annual report.
As on October last the average age of Indian fleet was 18 years. The age profile of the fleet in terms of GT shows that over 42 per cent of overseas fleet (3.45 million GT) was over 20 years, while another 14.2 per cent was between 15 and 19 years.
The outlook for the fleet strength remains positive with the continuing firm trends in the freight market and creation of funds through mandatory provision transfer of 20 per cent profits to the tonnage tax reserve for acquisition of ships.
The tonnage tax reserve created by the Indian shipping companies is around Rs 2,000 crore. With the fleet acquisition plans by Indian companies, the fleet will cross 10 million GT shortly.
However, there has been an increasing trend of ships being acquired by subsidiaries of Indian companies abroad, the annual report says.
The share of Indian fleet in the carriage of the country’s overseas trade declined significantly in the last seven years.
In 1990-91, the Indian fleet’s share was as high as 35.5 per cent of the overseas trade, and the balance was carried by foreign vessels.
The percentage declined to 31.5 per cent in 1999-2000, and the next year reduced significantly to 22.4 per cent. Currently, it is around 14 per cent.