Shares of Shipping Corporation of India (SCI) and Great Eastern Shipping Company jumped up to 5 per cent on the BSE amid reports that the Centre is likely to approve the Coastal Shipping Bill 2024 in today’s Cabinet meeting.
Shipping Corporation’s shares rose 4.6 per cent to hit an intraday high of Rs 249.45. On a year-to-date (YTD) basis, the stock has gained over 51 per cent. Shares of Great Eastern Shipping Company jumped 2.58 per cent to touch the day’s high of Rs 1,312. The stock has surged around 35 per cent in the ongoing calendar year so far.
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The rally follows the report by CNBC Awaaz that the Centre may give its nod to the Coastal Shipping Bill to ease out the rules in the shipping sector and boost business activity on the ports.
The bill is expected to be approved by the Cabinet today and will be presented in the Parliament next month, when the session resumes. If the Bill does not face any resistance, it will likely come into force in the next 2-3 months.
Why the Coastal Shipping Bill is crucial to India’s maritime future?
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With the aim to improve traffic at major ports, the bill proposes to remove the requirement of trading licence for Indian flag vessels for coastal trade. Regulations for international trade ships are also likely to be aligned to global standards.
This means that ships bearing an Indian flag will no longer require licences to enter ports and the ships bearing an international flag will have licensing aligned with international standards.
The Bill also proposes to integrate coastal maritime transport with inland waterways. The Centre aims to create a favourable environment to lower transportation costs while promoting competition within the sector. It could also introduce measures for Indian vessels to increase their share in coastal shipping.
India is targeting to increase its container handling capacity by two-fold in the next two years and create around 20 lakh jobs, according to Shipping Minister Sarbananda Sonowal. He said that plans are on to set up shipbuilding and repair clusters in five states – Gujarat, Maharashtra, Kerala, Andhra Pradesh and Odisha.
India’s shipping industry has witnessed significant growth in recent years and a need was felt to have a separate legislation on coastal shipping, according to the Ministry of Shipping. Shipping has emerged as a crucial segment of the transport chain, and a policy for the sector will help meet the demands of the shipping industry, the ministry said.
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India is the 16th largest maritime nation in the world. The sector contributes to 95 per cent of India’s trade by volume and 70 per cent by value, according to data from Invest India.
India is the third largest nation in terms of ship recycling, by tonnage. The country has 12 major ports and 200 minor ports, with the Jawaharlal Nehru Port Trust in Mumbai being the largest, while Mundra is the biggest private port.
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