In an effort to become a global manufacturing powerhouse, the South Asian country is investing billions of dollars in infrastructure upgrades. Prime Minister Narendra Modi, who was re-elected to a third term this week, wants the country to be developed by the year 2047.
India, the third-largest economy in Asia, is to establish a new shipping firm in order to increase its fleet size by at least 1,000 ships over the course of the next ten years, according to two government officials.
In an effort to become a global manufacturing powerhouse, the South Asian country is investing billions of dollars in infrastructure upgrades. Prime Minister Narendra Modi, who was re-elected to a third term this week, wants the country to be developed by the year 2047.
Along with international corporations and the state-run Shipping Corp of India, the yet-to-be-named company will be jointly controlled by state-run enterprises in the oil, gas, and fertiliser sectors, which will provide it with business.
Requests for comments from the shipping and oil ministries of India were not answered.
The sources, who asked to remain anonymous since they were not permitted to talk to the media, said that the goal is to cut freight outgoings to foreign companies by at least a third by 2047.
According to current predictions, freight expenses would increase to $400 billion by 2047 as exports and imports increase, according to one of the people with firsthand knowledge of the situation.
According to the source, Indian enterprises incurred freight expenditures of $85 billion in the 2019/20 fiscal year, of which $75 billion was attributed to the use of foreign boats.
India is turning to international carriers because its maritime fleet has not been able to keep up with the country's increased commerce, which includes the export of refined oil products and the purchase of energy.
According to the reports, India has a fleet of roughly 1,500 big ships, including dry bulk carriers, LNG carriers, tankers, and container ships.
According to a government document seen by Reuters, the oil and shipping ministries of India decided in January that cooperation between the new business and all state-run oil companies would be maintained.
"Tanker acquisition and ownership, operations and other areas of shipping" was one of the areas of knowledge that they would use from the Shipping Corp of India.
The memo said that in order to create a plan, government and industry representatives jointly organized a working group on May 16 by the two ministries.
The new company would be headquartered in GIFT IFSC, a financial center in Gujarat, the home state of Modi in the west, which hopes to compete with hubs like Singapore by providing tax breaks and a more simplified regulatory framework.
According to the first source, it would get seed money from a marine development fund the government intends to establish in partnership with significant port authorities, which would have a value of around 300 billion rupees ($3.6 billion).
The two ministries want state-run enterprises to sign 15-year charter relationships with the new entity in order to receive low-cost, long-term loans for funding ship-building.
This is a change from the way that charters for one or two years or individual cruises are currently booked.
"In return the state-run companies can also become participants in the new ship owning and leasing entity," said a source.
"The goal is to combine the demand for government-side cargo from various ministries, primarily for cargoes containing energy and fertilizer."
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