Mr GK Vasan union minister of shipping informed the Lok Sabha that a proposal has been received from Shipping Corporation of India seeking policy measures for cargo support and reservation for Indian flag vessels in India’s Export-Import trade.

The main features of the proposal are as under:

1. Reservation of 33.33% of India’s seaborne EXIM cargoes for Indian flag vessels only.

2. Long term charters of 5 to 7 years to be given to Indian flag companies in respect of crude oil, petroleum products and gas (in case of LNG charter period to be 20-25 years), thermal coal, coking coal, fertilizer, iron ore.

The major industrialized economies such as Japan, China, South Korea, and USA have followed a proactive policy of cargo reservation for national flag vessels for carriage of all national cargoes for strengthening their national tonnage.

The Government have introduced tonnage tax regime for shipping sector in 2004. Indian shipping industry has been provided cargo support through right of first refusal and policy of FOB (free on Board) import is being followed for government owned/controlled cargoes. Further, chartering of vessels for movement of cargo on private account is regulated through the Directorate General of Shipping taking into consideration the availability of Indian flag vessels. These measures are likely to be continued to support Indian shipping Industry.