‘Indian shipping lines should have special fiscal regime’.

Kolkata: The Indian shipping lines' share in the country's export -import trade has come down to 8.5% from 13% two years ago, which has actually increased the component of freight to the cost of landed goods.

Shipping Corporation of India (SCI) chairman S Hazara, addressing the 72nd annual general meeting of the Calcutta Freight Brokers' Association on Friday, said Indian shipping lines' share in the country's exim trade was coming down for a lack of level playing field with foreign shipping lines.

While 95% of shipping across the globe origins from a fiscal regime, which taxes shipping at rates between 0% and 0.5%, Indian shipping is taxed between 8.5% and 9%.

“Indian shipping lines should come under special fiscal regime so that it gets a level playing field with global shipping lines,” Hazara said.

He said for every dollar earned by an Indian shipping line while carrying out the country's exim trade, 67 cents goes to the Indian economy, whereas for every dollar earned by a foreign shipping line in carrying out India's exim trade, only 10 cents goes into the Indian economy.

So it was imperative that the Indian shipping lines' share increases in carrying out the country's exim trade but “the share has reduced from 13% two years back to 8.5% at present,” Hazara said. He said this reduction has also increased India's freight component to the cost of landed goods. While component of freight to the cost of landed goods in developed countries was 4% and in developing countries 7%, in India it was 9%.

However, India's crude,coking coal and thermal coal imports are going to go up in the coming years, while exports of iron ore would also be on the rise.

In such a situation, increasing Indian shipping lines' share was very important as it would reduce the component of freight to the landed cost as well help in pumping more money into the Indian economy, according to Hazara.


Source : Financial Express