RESTRICTED
WORLD TRADE S/NGMTS/W/2/Add.36
30October 1995
ORGANIZATION
(95-3348)
Original: English Negotiating Group onMaritime Transport Services
COMMUNICATION FROM INDIA
Response toQuestionnaire onMaritime Transport Services
Thefollowing communication iscirculated attherequest ofIndia tomembers oftheNegotiating
Group onMaritime Transport Services.
__________
I. Market Structure
Vessels
1. Thestructure ofthenationally owned andoperated fleet interms oftotal number ofvessels,
tonnage andflags isattached atAnnex 1ason1January 1995 which comprises 437ships. Itwill
beseen from theAnnex thatason1January 1995 thenationally-owned overseas fleet isof231vessels
of9.615 million DWT with coastal fleet of206vessels of0.897 million DWT totalling 437vessels
of10.51 million DWT. Inaddition totheabove, Indian shipping companies have acquired 18vessels
comprising of0.461 million DWT onbareboat-cum-demise-charter. This tonnage willbeadded to
theNational fleet after termination ofthebare-boat-cum-demise charter.
Trade
2. Allmajor ports during theyear1993-94 handled anaggregate of179.26 million tonnes ofcargo.
Outofthese, 53.22 million tonnes ofcargo wasloaded forshipment overseas and23.41 million tonnes
ofcargo wasloaded forcoastal shipping. Approximately 81million tonnes ofcargo wasreceived
from overseas and21.70 million tonnes ascoastal shipment cargo. About 95percent ofIndia 's
international trade byvolume and77percent byvalue moves byseatransport.
3. Theexport fortheyear 1993-94 byvalue wasUS$22,155.8 million andtheimports forthe
same year wasUS$ 23,194 million. Ofthis, about 77percentwascarried bysea. TheIndian export
byvolume carried byseais47.11 million tonnes while theimport is75.19 million tonnes fortheyear
1992-93 (latest available).
4. Outofthetotaloverseas trade of122.30 million tonnes intheyear1992-1993 (latest available),
thecargo carried byIndian lines was42.66 million tonnes (34.9 percent) andthequantity carried
byforeign lines was79.64 million tones (65.1 percent).
5. Data forshare ofcross trading cargo carried byNational flagships isnotavailable.S/NGMTS/W/2/Add.36
Page 2
Organization ofcargo
6. Thetotal quantity ofcargo fortheyear 1992-93 carried by:
Liner shipping 17.14 million tonnes (14.01 %)
DryBulk shipping 59.12 million tonnes (48.34 %)
Liquid Bulk shipping 46.04 million tonnes (37.64 %)
7. Information regarding estimated share interms ofvalue, ofliner shipping which iscarried
byconferences andconsortia inIndia 'sexternal trade isnotavailable.
However, information isavailable only inrespect ofliner exports from four major ports viz.
Bombay/JNPT, Cochin, Madras andCalcutta andtheinformation fortheyear 1992-93 isasunder:
(i) Total liftings
(ii) Conferences
(iii) Non-conference
(iv) Indian flaggroup (IFG)41,09,693 metric tonnes
14,59,151 metric tonnes
26,50,542 metric tonnes
3,69,532 metric tonnes
Approximate share ofIFGinthethree major liner routes asunder:
UKcontinent 18.33 %
India/Japan FarEast 10.20 %
India/US Atlantic East 16.21 %
Coast/Canada
8. Refer toanswer Question 7.
9.
India/Poland
Total
Indian Flag Group
Polish Ocean LineExports 1993/1994
14,204 metric tonnes
501(4%)
13,703 (96%)
Poland/India
Total
Indian Flag Group
Polish Ocean LineImports 1993/1994
28,290 metric tonnes
25,637 (91%)
2,653 (9%)
India/A.R.E.
Total
ByIndian lines
ByA.R.E. lines
Bythird flagExports 1993/1994
15,079 metric tonnes
1,588 (11%)
5,811 (39%)
7,680 (50%)S/NGMTS/W/2/Add.36
Page 3
India/Czechoslovakia
ByIndian lines
ByCzech lines
Bythird flag
TotalExports 1993
527metric tonnes (approx) (21%)
nil(approx)
1961 metric tonnes (78.80 %)
2488 metric tonnes
Czechoslovakia/India
ByCzech lines
ByIndian lines
Bythird flag
TotalImports 1993
4,181 (approx) 16.60 %
15,736 (approx) 62.40 %
5,311 (approx) 21%
25,228 (approx)
CIS/India
ByCISlines
ByIndian lines
BySCIImports 1993/1994
notavailable
22,706 metric tonnes
16,670 metric tonnes
India/USSR
ByCISlines
ByIndian lines
BySCIExports 1993/1994
notavailable
21,388 metric tonnes
21,388 metric tonnes
10. During theyear 1993-94, allmajor ports inthecountry handled 12.25 million tonnes of
containerized cargo asagainst thetotal traffic of179.26 million tonnes.
11. Below 25percent.
Ports andauxiliary services
12. During theyear 1993-94, allmajor ports handled anaggregate of179.26 million tonnes of
cargo. Thedetails ofcargo handled atvarious major ports areasbelow:
Name
Calcutta
Haldia
Paradip
Vizag
Madras
Tuticorin
Cochin
New Mangalore
Mormugao
J.L. Nehru
Bombay
KandlaCargo handled
(inmillion tonnes)
5.17
13.33
8.33
25.59
26.54
6.70
7.62
8.63
18.72
3.39
30.74
24.50S/NGMTS/W/2/Add.36
Page 4
Outof179.26 million tonnes, 12.25 million tonnes ofcargo wascontainerized.
13. There isnopreference toforeign suppliers vis-a-vis thenational suppliers inanyoftheservices.
Thedemand foraparticular supplier isdetermined bythefactors ofdemand andsupply depending
onthequality ofservice rendered. Thecustoms clearance system isthrough astatutory actandall
theduties levied, whether itisaforeign supplier ofanational supplier, areaspertheschedule oftariff
contained intheCustoms Act.
Shippers andimporters situated inIndia donothave anyspecific preference forforeign suppliers
ofauxiliary services initems referred inthequestionnaire. Thedecision ofshippers topatronise a
supplier isinfluenced bythequality ofservices offered andnotonthefactwhether theoperator is
foreign based ornot.
Decisions regarding maintenance andrepair ofvessels aresolely influenced byoperational
requirements, cost andefficiency andtime parameters. Nopreference isgiven toforeign parties,
however,sparesrequiredformaintenanceandrepairstotheequipmentonthevesselshavetobeprocured
from theoriginal manufacturers oftheequipment who aremostly foreign suppliers. With theeasing
offoreign exchange position inIndia, Indian shipping lines arenow allowed toutilize foreign repair
yards wherever necessary after taking intoconsideration thetime andcostfactors.
There arequite afewforeign agencies which have come forward forsetting upofcontainer
freight stations/Inland Container Depots. Some foreign agencies have shown interest forsetting up
ofcargo handling, storage, warehousing facilities andfreight forwarding services inIndia.
14. None insofarasroad transport andinland water transport areconcerned.
II. Regulatory Structure
General
1. TheInternational Maritime Transport Sector isgoverned bytheMinistry ofSurface Transport
through itsspecialised organization oftheDirector-General ofShipping, Bombay. TheMerchant
Shipping Act, 1958 isadministered bytheDirector-General ofShipping under thepowers granted to
himtherein, encompassing allactivities ofshipping, likeshipping administration, maritime safety,
maritime training, examination andcertification, shipping development, etc. TheDirector-General
ofShipping isthedesignated authority inthecountry onallmatters ofshipping. Allinternational
Conventions pertaining tomaritime sector arealsoserviced bytheDirector-General ofShipping towards
ratification andnecessary incorporation intheNational Laws.
2. There arenoregulatory measures adopted fortransportation ofdrycargo. Thedrybulkcargoes
arebeing transported aspertheterms ofthecontract. However, shipping arrangements fordrybulk
cargoes forGovernment owned andcontrolled cargo aremade through Shipping Coordination and
Chartering Organization intheMinistry ofSurface Transport (TRANSCHART).
Consequentuponthede-canalizationofcargoeslikefertilizers,rockphosphateetc.thesecargoes
arenow being transported aspertheterms ofthecontract. TheGovernment policy istosellonCIF
andbuyonFOB basis. Asperthepolicy oftheGovernment, petroleum andother liquid oilcargo
aretransported mainly byIndian owned vessels andincaseofnon-availability ofsuitable Indian tonnage,
crude isbeing carried bychartered foreign flagvessels. With regard toexport onCIFandimport
onFOB fordrybulk cargoes, intheabsence ofsuitable Indian vessels theexporters/importers have
totakenecessary charter permission forengaging foreign flagvessels from theDirector-General of
Shipping.S/NGMTS/W/2/Add.36
Page 5
3. ForoperatingIndianvesselsonlinerroutesnecessarypermissionhasbeengivenforthreenational
lines viz.Shipping Corporation ofIndia, SCINIDIA Steam Navigational Company andIndia Steamship
Company. Government hasnow thrown open theliner routes totheprivate sector shipping inthe
sectors inwhich theabove three lines arenotoperating services. Foroperating allvessels registered
under Merchant Shipping Act,necessary licence hastobeobtained fortheDirector-General ofShipping
aspertheprovisions ofMerchant Shipping Act. Similarly, foroperation offoreign flagvessel inthe
Indian coast, theoperators have totakeproper licence under Section 407ofMerchant Shipping Act.
Port clearance willnotbegiven tothese vessels which donothave aproper licence from Director-
General ofShipping fortransportation from oneIndian port toanother Indian Port.
4. The Multimodal Transport Operators arerequired toberegistered under theMultimodal
Transportation ofGoods Act, 1993, with thecompetent authority, i.e.Director-General ofShipping.
Theminimum requirements forregistration have been detailed inSection 4ofthisAct.
5. Responding totheneeds ofinternational trade, theMinistry ofSurface Transport hasalready
opened itsPorts Sector forprivate sector participation. Broadly, following areas have been identified
forprivate sector participation inthePort Sector:
(a) Construction, operation &maintenance ofcontainer terminals.
(b) Construction, operation &maintenance ofvarious cargo handling terminals.
(c) Creation, operation &maintenance ofdrydocking &ship repair facilities.
(d) Creation andoperation ofnew warehousing andstorage facilities.
(e) Provision, operation andmaintenance offloating crafts.
(f) Provision ofcranage services.
(g) Dredging.
(h) General maintenance andother miscellaneous services.
ThelandandwaterfrontisleasedtovariouspartiesforerectionofnewfacilitiesunderSection34
ofmajor Port Trusts Act, 1963. Entrepreneurs arealsoallowed toperform thefunctions which have
been entrusted toPort Trust Boards under Section 42ofMPT Act.
Fortheallotment/leasing ofland/waterfront/other facilities foracommercial purpose, theports
invite competitive bidsandselect thebestoffers(s) after examining thefinancial andtechnical soundness
ofeach proposal.
6. International Maritime Transport hasnotbeen defined assuch intheMerchant Shipping Act,
1958. However, Section 3(18)(A) defines "International Voyage" asthevoyage from ortoaportor
place inIndia toorfrom aport orplace outside India.
Similarly, thecoastal trade ofIndia hasalsobeen defined under Section 3(2) asfollows:
"Coastal trade ofIndia means thecarriage byseaofpassengers orgoods from anyport or
place inIndia toanyother port orplace onthecontinent ofIndia."
7. Section 3(18) defines "Indian ship" asaship registered assuch under thisActandincludes
anyship registered inanyport inIndia atthecommencement ofthisActwhich isrecognized asan
Indian ship under theprovision ofsub-section (2)ofSection 22. National Shipping Enterprise has
notbeen defined assuch. However, Section 21oftheMSActbrings outtherequirements foracompany
(orNational Shipping Enterprise) oranindividual toown Indian ships. Thebasic requirements are
thattheowner willhave tobeacitizen ofIndia oracompany orcooperative society which willhave
tobeestablished under anyCentral orState Actandmust have theprincipal place ofbusiness inIndia.S/NGMTS/W/2/Add.36
Page 6
Market access
8. (a),(b)&(c)
Atpresent thecostal trade ofIndia isrestricted toIndian ships only innational interest.
Therefore, thecoastal trade isnotavailable toforeign shipping, except under alicence granted bythe
Director-General ofShipping. However, theCabotage Law hasbeen relaxed bytheGovernment for
thelimited purpose ofcontainer vessels andlashbarges. Indian lines operating onaparticular route
have toobtain atrading licence from Director-General ofShipping. Further, there ispreference of
employing national vessels forcarriage ofliquid cargo andbefore deploying aforeign flagvessel for
import/export ofdrybulk, itisconfirmed thatnational vessels arenotavailable.
Restriction ofthecoastal trade isnotbased onthequantity ofcargo carried oranyother
numerical quota. There isanoverall restriction oncoastal trade andisrelaxable oncasetocasebasis
innational interest.
There isnomandatory form ofcargo sharing with partner countries. However, amodified
cargo support scheme hasbeen approved bytheGovernment forimplementation. Under thisScheme,
theGovernment hasdecided tooffer cargo support inaphased manner toIndian flagvessels inthe
following three sectors inthecarriage ofIndia 'soverseas export trade:
Proposed share
India/UK/Continent 30%
India/Japan-Far East 20%
India/US Atlantic East Coast/Canada 25%
Theabove share would begradually increased to40percent inthenear future.
Asregards drybulk andoilcargoes, though there isnomandatory cargo sharing mechanism,
preference isgiven toIndian lines.
8(d). ThegovernmentofIndiapermitsemploymentofforeignnationalsinareasconnectedtomaritime
transport wherever they areapartofalarger turn-key project e.g.oilexploration/Off -shore platform
operations, etc.Insuch cases, theparticipation offoreign nationals comes bywayofneed ofexpertise
orasamatter oftechnological requirement.
9. Forsupply ofShipping transport services commercial presence isnecessary asanIndian ship
canbeowned byacitizen ofIndia oracompany, orabody established byLaw which hasitsprincipal
place ofbusiness inIndia orCooperative Society registered under Cooperative Societies Act.
Allvessels areexpected tousetheportequipments, iftheyareavailable forhandling thecargo.
Incase these arenotavailable, thevessels canusetheir own equipment. However, there isno
discrimination inallotment ofport equipments between theforeign andnational maritime transport
suppliers.
10. No. Investment inIndian shipping companies ispermitted toNon-Indian citizens upto51
percentunder automatic clearance procedure andshareholding over 51percenthastobecleared by
theForeign Investment Board.
(Source: INSA Annual Review 1993-1994)S/NGMTS/W/2/Add.36
Page 7
11. Only Indian ships registered with theRegistrar ofIndian ships canflytheIndian national flag.
AnIndian ship isonewhich isowned wholly bytheperson who isacitizen ofIndia orbyabody
established byLawwhich hasitsprincipal place ofbusiness inIndia oraCooperative Society established
under Indian Cooperative Societies Act.
11(a). Asgiven above.
11(b). AllIndian ships require alicence fortrading. Permission ofgovernment isrequired for
participation offoreign capital inaparticular investment.
National treatment
12. There isnopreferential treatment granted tonational shipping vis-a-vis international shipping
inmatters ofauxiliary services, treatment atports etc. However, there isapreferential treatment for
Indian shipping companies placing orders forconstruction ofships with Indian shipyards totheextent
of30percentofcost, 20percenttobemetbyGovernment and10percentbytheIndian ship-owners.
13. Allmajor ports provide pilotage, towing andtugassistance, provisioning, fuelling, watering,
garbage collecting, ballast waste disposal andports captain 'sservices, navigation aids, shore-based
operational services essential toshipoperations, including communications, water andelectrical supplies
andAnchorage, berth andberthing services. Emergency ship-repair facilities areavailable attheports
ofCalcutta, Madras, Bombay andVizag. There isaproposal tosetupnewshiprepair facilities with
thehelp ofprivate sector attheports ofMormugao, Haldia, Cochin andParadip.
14. Pilotage, towing andtugassistance, provisioning, fuelling andwatering, garbage collecting
andballast waste disposal andPortCaptain 'sservices, navigation aids, shore-based operational services,
essential toshipoperations including communications, water andelectrical supplies, anchorage, berth
andberthing services arealways provided byports.
15. Alltheservices areavailable tovarious shipping lines onnon-discriminatory basis.
16. No
17. No.
18. Allvessels areexpected tousetheportequipment ifthey areavailable forhandling thecargo.
Incase these arenotavailable, thevessels canusetheir own equipments. However, there isno
discrimination intheallotment ofportequipments between theforeign andnational maritime transport
suppliers.
19. No.
Most-favoured-nation treatment
20&21. India hasentered intobilateral Shipping Agreements with several countries. These
Agreements always provide forsharing ofcargo with partner countries ontheprinciples ofparity and
equality.
22. AspertheUNCTAD Code ofConduct forLiner Conferences, aminimum 20percentcargo
istobereserved forthethird flag, leaving thebalance 80percent tobeshared equitably between
thetwoparticipating countries, whose two-way trade iscovered under thearrangement situated ateither
end. Itisforeach Conference todevise anappropriate pooling arrangement andallocate theshare
tothenational lines asenvisaged intheprovision ofUNCTAD Code forLiner Conferences. However,S/NGMTS/W/2/Add.36
Page 8
even though India isasignatory totheUNCTAD Code forLiner Conferences, thegovernment has
notimposedanymandatoryrequirementontheConferencestoallocatecargoundersuchanarrangement.
23. India hasalready concluded Agreements foravoidance ofdouble taxation (DTAAs) with more
than40countries. These agreements, inter alia, cover taxes payable onprofits earned bytheshipping
enterprises oftheContracting parties from international traffic andprovide forfullorpartial exemption
ofsuch profits from double taxation. These agreements areoriented toencourage freeflow oftrade
between theContracting parties byproviding such exemptions.
24. There isnopreferential treatment toanyparticular country with respect toaccess touseof
port andharbour facilities.
25. There arecurrently nocounter measures which enable theGovernment toretaliate unilaterally
inthefaceofperceived restrictions bypartner countries.
26. There arenosuch measures including imposition ofselective restrictions onthesupply of
maritime transport andrelated services.
27. There arecurrently nomeasures relating toaccess tonon-commercial cargoes.
28. Containers arebeing procured bytheMultimodal Transport Operators onlease oronoutright
purchase basis. Since acontainer istreated asamarine equipment, requisite permission isbeing given
bythedirector-General ofShipping toaMultimodal Transport Operator ofreleasing thecontainer
from abroad. Containerisation ofcargo willimprove theefficient andsafetransportation ofcargo.
29(a). Nocomments.
29(b). Multimodal Transportation iscovered byMMTG (Multimodal Transportation ofGoods) Act,
1993. TheActcame intoforce w.e.f. 16October 1993, andtheActprovides forregulation ofthe
Multimodal Transportation ofGoods from anyplace inIndia toaplace outside India onthebasis of
amultimodal transport contract and formatters connected with orincidental tomultimodal
transportation. According tothisAct, noperson shall carry onorcommence business onmultimodal
transportation unless heisregistered under thesaidAct. Such registration isgranted bythecompetent
authority, namely Directorate General ofShipping. Theapplicant company forsuch registration should
beacompany registered under theCompanies Actandpartnership andproprietary firms arenoteligible
forregistration. TheMultimodal Transport Operator soregistered under theActwillissue multimodal
transport document andthedocument willbesigned bytheMultimodal Transport Operator oraperson
duly authorised forthepurpose. This document canbeissued either innegotiable ornon-negotiable
form.
(c)&(d). TheMonopolies andRestrictive Trade Practices Commission ofIndia iscompetent
toredress anygrievance regarding competition orabsence thereof intheMaritime transport.
Shipping conferences
30. Yes.
31&32. Shipping lines operating service toUSA arerequired tofilethetariff with Federal
Maritime Commission andaresubject toitsrules andregulation. Non-compliance would involve
penalties leviable bytheFMC. Similarly, lines loading cargoes exSriLankan port(s) arerequired
tofilethetariff with SriLanka Freight Bureau. InBangladesh, quantum ofcargo tobelifted bya
shipping lineissubject togrant ofwaiver bytheBangladesh Director-General ofShipping.S/NGMTS/W/2/Add.36
Page 9
However, inIndia, noConference Agreements/tariffs arerequired tobenotified. Nostatutory
authority hasthepower toensure compliance ofthetariff.
33. Allconferences allow Independent Rate Action.
34. There arenoinstitutional arrangements dealing withloyalty arrangements between Conferences
andshippers andAgreements entered intobetween Conference andOutsiders.
35. After theintroduction ofMultimodal Transportation ofGoods Act,documents arebeing issued
byMultimodal Transport Operators. Under thisarrangement, theearlier system ofdocuments being
issued bytheshippers isbeing shifted totheMultimodal Transport Operators. Asperthenew
arrangement, MTOs will negotiate with shippers anditwill help transporting thecargo. The
responsibility ofthecargo solely liesontheMultimodal Transport Operator andthere exists only a
contract, loyalty between theMTOs andtheshippers.
With regard tosettlement ofdisputes, theshippers/carriers/MTOs arefreetoamicably resolve
theissues orsettle thesame through legal recourse. TheMTOs shall beliable forlossresulting from
anyloss ordamage totheconsignment aswell asdelay indelivery oftheconsignment andany
consequential lossofdamage arising from such delay. This makes MTO strictly liable foranyloss
which cannot bepassed ontotheshipper. Even iftheservants/agents/shippers/carriers areresponsible
forlossordamage ordelay indelivery, theliability exists only onMTO. TheMTO hasexcess liability
than thatofthecarrier.
36. There isnoLaw which provides consultations with shippers byShipping Lines. However,
grievance oftheshippers aresometimes referred toDirector-General ofShipping who alsotries to
getthegrievances settled amicably andmutually. There isnostatutory powers available with DG(S)
tointervene incommercial disputes.ANNEX 1S/NGMTS/W/2/Add.36
Page 101. Thestructure ofthenationally-owned oroperated fleet interms oftotal number ofvessels, tonnage andfreight bytheprincipal types ofvessels are
asunder:
STRUCTURE OFNATIONALLY-OWNED OROPERATED FLEET
Type ofVessels Number ofVessels Deadweight Tonnage
Coastal Overseas Total Foreign Coastal Overseas Total Foreign
Onbare-boat-cum-demise
charter national shipowner
OIL TANKERS
i.Product Carrier
ii.Crude OilTanker12
230
3142
33-
2145450
82249813183
3334969958633
3417218-
299200
LIQUID GAS CARRIERS
i.Ethylene Gas 3 2 5 - 6960 34637 41647 -
CHEMICAL TANKER
i.Acid Carriers - 6 6 - - 154993 154993 -
Combination carriers - 3 3 - - 311975 311975 -
GENERAL CARGO 44 45 89 - 63281 719886 783167 -
DryCargo-Bulk Carrier 13 104 117 16 410031 4103200 4518231 161842
CONTAINER SHIPS
i.Cellular Container - 6 6 - - 109316 109316 -
Refrigerated Carrier - - - - - - - -
Ro-Ro - - - - - - - -
Cargo &Passenger 13 1 14 - 25922 8820 34742 -
Timber Carrier 1 3 4 - 6579 19645 26224 -
Tug 17 - 17 - 2310 - 2310 -
O.S. Vessel 74 - 74 - 91854 - 91854 -
Specialised Vessel 27 - 27 - 62791 - 62791 -
Total 206 231 437 18 897427 9615674 10513101 461042