Coastal shipping is the term used for describing the movement of cargo by ships within a particular country. It has numerous advantages: it is cost-effective, environment friendly and more favored than alternative modes of cargo transport in developed countries. Despite its wide scope and popularity in other nations, India has sadly never realized coastal shipping’s true potential.
Situation in India
12 of India’s 26 states are covered by the seacoast, spreading across 7,517 kms and about 200 small harbours. Despite a strong platform, the government has so far failed to transform coastal shipping into a lucrative business opportunity in India. Most cargo that can be transported via costal shipments are still being transported in traditional modes like Rail and Road. Government regulations are not coastal-shipping friendly yet. As of October 2011, talks were on to introduce more friendly and attractive schemes to boost coastal shipping.
Major challenges/ difficulties in India’s coastal shipping
Coastal shipping in India faces the following challenges:
- Lack of infrastructure: it is one of the biggest obstacles faced in coastal shipping industry. The government has failed to develop infrastructure that is expected to make shipment easy and efficient. Infrastructure involves electricity, road network and overall area development which supplements the use of this route.
- Lack of lucrative government schemes: Unlike other channels of transportation, the government has not made any efforts to benefit coastal shipping users financially. Companies using coastal shipments until now had to face harsh and impartial taxes like no exemption from Income tax, customs duty on bunkers, landing fees, etc.
- Slow and cumbersome process at Customs: The shipment process is extremely slow and laborious compared to other modes of transport which are much faster. Companies are unwilling to waste precious time in adhering to these processes (World Cement, 2010).
As of 2012, in Kochi alone the government has proposed to develop 17 minor and medium posts to boost coastal shipping in India. A ten-year plan titled Maritime Agenda 2010-2020 consisting of a budget of USD 110 billion has been put in place to increase India’s ports’ capacity significantly and reduce its dependency on road transport. By 2015, it targets to handle about 50% of India’s national cargo by coastal shipping means. The government has realized the benefits offered by this mode of transport and has accordingly taken measures to boost its growth (OIFC, 2012).
- Overseas Indian Facility Centre (OIFC, 2012). Ports in India. [online]. Available at http://www.oifc.in/Sectors/Infrastructure/Ports Last accessed on 28th May 2012
- World Cement (2010). Indian coastal shipping. [online]. Available at http://www.worldcement.com/sectors/sustainability/articles/Indian_coastal_shipping.aspx Last accessed on 28th May 2012.