In a move aimed at benefitting farmers and removing transport bottlenecks for fertilisers, the government has done away with the licensing permits for foreign vessels transporting fertilisers.
The development assumes significance as a study under the government's Sagarmala project indicates that movement of 6-7 million tonne per annum (MTPA) of fertilisers via coastal shipping will save Rs 800-900 crore.
The decision comes after the government abolished the licensing requirements for foreign vessels transporting agriculture, fishery and animal produce, besides allowing Indian citizens to charter ships for these.
There is a need to improve access to farm inputs
such as good quality fertilisers and seeds in order to double farmers' income, according to a communique by Ministry of Shipping to DG Shipping.
"The desired improvement in access to inputs can be achieved by enabling transportation and logistics to be flexible and reliable for transporting goods within various parts of the country," the communique said.
Accordingly, in exercise of the powers under the Merchant Shipping Act, now a foreign vessel is not required to obtain a licence from the Director General (DG) of Shipping for engaging in coasting trade of India, for carriage by sea of fertilisers, it said.
The relaxation is subject to conditions like quantity of fertilisers should contribute to at least 50 per cent of the total cargo onboard the ship, it said.
Also, Indian law enforcement agencies like Navy, Coast Guard, State Maritime Police and Customs shall be allowed to board such ships any time in the sea for ascertaining the bonafide credentials of the ships and crew.
As per the existing regulatory framework, a foreign ship can load cargo from one place of port in India and discharge at other place or port in the country only under a licence issued by the DG Shipping.
"The move is another step to improve the condition of the farmers and increase their income," Shipping Minister Nitin Gadkari told PTI.
The committee on doubling farmers' income has called for a strategy towards enabling farmers to compete at a global scale and has highlighted unavailability of fertilisers in desired quantity, he said.
"Waterbonre transportation has the potential of simultaneously reducing the per tonne km cost of transporting goods to one-sixth as well as reducing the greenhouse emissions per tonne km of transportation of long distances," Gadkari said.
Shipping Secretary Gopal Krishna said the move will not only be a significant step in benefitting farmers but would also qualify for reimbursement of freight subsidy which will encourage the coastal movement of fertilisers, under the Nutrient Based Subsidy Policy.
Krishna said while rail is the primary mode of transport for long-distance fertiliser movement, various studies indicate that a modal-mix shift towards coastal shipping can significantly reduce costs.
Providing for two-way cargo movement has the potential of reducing the cost of transport, improving cargo volumes and facilitating investment in fleet, the Secretary added.
A study under Sagarmala found that the movement between Andhra Pradesh and Maharashtra via rail costs Rs 1,928 per tonne while the same movement via road and rail-supported coastal shipping could cost Rs 1,415 per tonne with a potential cost saving of about 30 per cent.
Another study has shown that about 10 fertiliser plants have the potential to shift to coastal shipping.
"Data suggests that with the right infrastructure and institutional support, it could be possible to move around 6-7 MTPA of fertilisers via coastal shipping - saving nearly Rs 800- 900 crore per annum," a report in Sagarmala said.
The present relaxation in licensing requirement has been given under section 407 of the Merchant Shipping Act, 1958.
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