Indian exporters have made a strong appeal for a government-led initiative to establish a globally competitive Indian shipping line. This move, they believe, would significantly reduce shipping costs and enhance the competitiveness of Indian exports in the international market.
The Federation of Indian Export Organisations (FIEO) highlighted that India paid a substantial $109 billion in transport service charges in 2020. This figure is projected to reach $200 billion by 2030 as exports grow towards the $1 trillion mark.
"An Indian shipping line with a 25% share could save $50 billion annually and alleviate the pressure exerted by foreign shipping lines on small and medium-sized businesses," stated FIEO President Ashwani Kumar during a pre-budget meeting with Finance Minister Nirmala Sitharaman.
The meeting, which included representatives from various trade and service sectors, also saw participation from export promotion councils for marine, leather, and gems and jewelry.
Additionally, the National Association of Software and Services Companies (NASSCOM), the Federation of Hotel and Restaurant Association of India (FHRAI), and regional chambers of commerce and industry were present.
Reports indicate that the government is considering the establishment of a shipping line, though the specifics of its structure remain unclear. Besides cost reduction, an Indian-owned shipping line would address the issue of international vessels bypassing India if they secure more cargo in Southeast Asia.
Among the other demands raised by FIEO during the meeting was the extension of the Interest Equalisation Scheme, which is set to expire at the end of this month, for another five years.
They also advocated for an increase in the interest subsidy from 3% to 5%. Furthermore, a request was made to raise the budget for marketing support under the Market Access Initiative (MAI) from Rs 200 crore to Rs 500 crore annually.
The leather industry, represented by the Council for Leather Exports Chairman Rajendra Jalan, called for the inclusion of the leather and footwear sector in the Production Linked Incentive (PLI) scheme. They also sought the removal of a 10% duty on specific leather imports and the elimination of export duties on certain locally produced leathers.
The Gems and Jewellery Export Promotion Council (GJEPC) Chairman, Vipul Shah, proposed a reduction in the import duty on precious metals from 15% to 4%. This, he argued, would release approximately Rs 982.16 crore in duty blockage, providing the industry with more working capital.
In the fiscal year 2024, gems and jewellery exports declined by 13.8% year-on-year to $32.7 billion, while leather exports dropped by 9.9% to $4.2 billion.
