Essay about Shipping Industry

603 Words Oct 15th, 2014 3 Pages
Indian shipping industry growth and constraints
The Indian shipping industry accounts for 95% of the Indian trade by volume and approx. 70% of Indias trade by value. This industry mainly relies on Indian exports and imports and has been severely impacted by the recession of 2008-09 as felt by the Indian industries. The main components of industry include Dry cargo which is required for the import of iron ore , coal etc ( accounting for 66% of indias shipping trade). and the wet cargo which includes crude oil etc (34.7%).The Indian shipping industry with its fleet of 1029 ships as on 2012 is the 15th largest in the world and has grown at a CAGR of 3.3% since 1970’s, but however there are plenty of new opportunities for growth as well as
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The development of Indias pipeline networks in the recent past is another factor posing a serious challenge to Indias wet cargo of shipping industry. Some of the constraints hindering the growth of the Indian shipping industry include the onerous tax regime imposed by the Indian government and this leads to companies in India owning a ship and registering it under a different flag. Similarly the wide regulatory framework in India provides a strict barrier for the entry of new players and also increasing the cost of compliance, this has led to a decrease in share of Indian shipping industry in the world. The growing proportion of old and outdated ships still being used by the industry highlight that there is a need of a better financing model and this is highlighted by the fact that till date India has no LNG carrier of its own despite the estimates that LNG trade will be worth 30 billion $ by 2020.Some steps have been initiated by the shipping corporation of India by tying up with OSAKA corporation but however there is still lack of financing models like KS or KG to account for a cost of 200 million $ to develop an LNG carrier. The Indian shipping industry no doubt has immense potential for growth but only if properly nourished and enriched with the support of government through better financing options ,

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