Shipping Corp needs $2 bn to replace old fleet: SCI chief

The domestic shipping industry will require US $2 billion to replace the existing fleet older than 20 years. The current capacity of all the fleet stands at 8.3 million Gross Tonnage (GT) out of which fleet with 2.4 million GT is aged 20 years and older.

Sabyasachi Hajara, chairman and managing director of Shipping Corp. of India, highlighted this fact as he stressed the need for investment in the sector. He was speaking at the two-day Indian Shipping Summit that started on Wednesday. "A 1% increase in GT can bring about a 0.0068% increase in the gross domestic product of the nation," he said.

Indian fleet witnessed a growth of 15% or 1.07 million GT in 2004-05. He expressed concern over the fact that even as domestic trade was rising, the share of Indian lines in international trade was falling.

"The Indian government needs to change its mindset with regards to investment in infrastructure in the domestic shipping industry," said Yudhishthir Khatau, managing director, Varun Shipping Ltd., and the president of Indian National Shipowners' Association.

He said that there was a need to mobilise capital and re-look at tax structures pertaining to the industry. "The main challenge is the uncertainty of the fiscal regime," he said.