Shipping firms require $20 bn to retain market share

The Indian shipping companies need to invest $20 billion in the next five to six years to maintain their existing market share of 13 per cent in carrying Indian cargoes, according to industry sources.

Out of $20 billion, the Shipping Corporation of India (SCI) can stretch up to $4 billion, said S Hajara, chairman and managing director, SCI.

Speaking on the sidelines of World Shipping Forum 2008 in Chennai organised by the Institute of Marine Engineers, Hajara said Indian ship owners' market share dropped to 13 per cent from 43 per cent in 1980s.

Indian carriers currently have 9 million gross tonnage (GT) which will go up to 10 million GT this year, and is expected to touch 20 million GT in the next 5-6 years.

Hajara said that to increase the fleet of ships with Indian flag, the government must extend financial incentives to Indian ship owners and preference should be given to Indian vessels to handle Indian cargo.

"Even though foreign direct investment (FDI) is permitted in the sector, we are unable get any FDI as against port sector," he added.

Meanwhile, the SCI has placed orders for 28 ships valued at around $1.6 billion. Delivery of the ships is expected to start from 2008, said Hajara.