Foreign direct investment begins to flow into the Indian shipping sector commencing with American Eagle Tankers’ flagging in their first vessel under the Indian registry. This comes almost a decade after the government having permitted 100% FDI in shipping
The New Year has brought in good news not only for the Indian maritime trade but also for American Eagle Tankers (AET). With the Indian government allowing American Eagle Tankers to flag in their single hull tanker to operate on the Indian coastal waters it has afforded India its first foreign direct investment (FDI) in shipping and for AET the opportunity to create history by setting a precedence of an outside entity joining forces with Indian players in the field to establish a healthy trend of providing operating synergy.
The Indian National Shipowners Association (INSA) had made a representation requesting the government not to allow foreign single hull tankers to operate in the coastal waters as this could lead to using the coast trade as a dumping ground. Hence the Director General of Shipping, Government of India has now issued a circular No. D.G. Shipping Circular No. 1 of 2009 dated 31st December 2009 ruling that henceforth no application from foreign shipping companies requesting permission to operate single hull tankers beyond the phase out period for single hull would be entertained.
Single hulls are due for scrapping by 2010. The International Maritime Organisation (IMO) has however, left it to the discretion of each maritime state to permit extension to the phasing out process up to 2015 or till the vessels reaches the age of 25 years (which ever is earlier). Accordingly, the Indian government has allowed single hull to be operated on the coast of India until 2015 or until the vessels reaches 25 years. This effectively means that AET are the first foreign shipping company and the last ones to operate their single hull on the Indian coast.
Informed sources state that AET’s first ship to get flagged in India is the 30,000 ton Eagle Meerut, which is about 15 years old. It will berth in an Indian port in about a week’s time. All company’s vessels are acceptable to Indian oil major.
A surveyor from the Indian Register of Shipping who did not want to be quoted informed that the AET management had been waiting eagerly for over six months, patiently manoeuvring its way to secure necessary permission from the government while being sensitive to the trades’ interests and careful not to step on anyone’s feet. “They want to act in concert with all other Indian ship owners for the promotion of the country’s economy and are looking forward to a long and mutually beneficial relationship,” he said.
The government had invited 100 per cent foreign direct investment (FDI) into the country’s shipping sector since almost a decade. Until now not a single dollar investment had come in. Though now the ban on single hull tanker has been put however other sectors of shipping continue to remain open to FDI.