India story as projected at the India Shipping Summit reflects opportunities galore
India Shipping Summit 2011 of Seatrade and TradeWinds brought the world to India registering a larger number of participants than before many being from overseas. With steady growth and development in the country being on course, the deliberations centered around “The next Decade : A Maritime Crossroads for India”.
The three-day extravaganza stretched from 10th to 12th October 2011 and focused on the demands of shipping and services which are headed for unprecedented levels. What was of greater interest among the participants was to make the right investment decisions and see them through.
Outlining the Indian Government’s policy K. Mohandas Union Shipping Secretary, government of India in his inaugural address stated that the Indian shipping industry was able to come out successfully through the downtrend because of its resilience and growth fundamentals being strong. “It is like going to sea where you will face the storms but it is your up-bringing which will see you through the trials and tribulations”, he contended.
Though coastal shipping has been a very low priority for the movement of goods he informed that the policy on coastal shipping was being finalized and would be out soon. He asserted that it is possible to bring about a change in the movement of goods by the coast. Mohandas stressed on the Ministry of Shipping’s role as a facilitator to the private sector towards achieving the targets of the Maritime Agenda 2020, “We hope to raise port capacity to 3.2 mi tons from the present 1.1 mi tons by 2022 and all departments of the government are working in that area,” he said. “But enhancement of port capacity does not mean just increasing the throughput but also increasing the draft in the ports, enhancing port connectivity by improving rail and road connectivity.”
S. Hajara, President of the Indian National Shipowners’ Association and Chairman & Managing Director of the Shipping Corporation of India explained, “Since India’s EXIM trade is expected to grow to $ 880 billion by 2020, shipping has to catch up with this demand and hence we need to be ready for the next decade. According to the Maritime Agenda 2010 – 2020 the tonnage which now stands at 10.45 million GT will have reach 43 million GT by 2020. To achieve this is a tall order because 40% of our fleet needs replacement over the next five years.” For achieving this tonnage will require an investment of $ 27.28 billion.
“According to IMF forecast India and China will contribute more to GDP growth than any other country,” informed Y. Khatau, President of BIMCO and Managing Director of Varun Shipping. “India with its several advantages has positioned itself as a major contributor to the World shipping market. Having a major share of global seafarers India has a big stake when it comes to piracy.”
Spyros Polemis, Chairman of the International Chamber of Shipping & Managing Director of Seacrest Shipping Co Ltd., said, “It is time the United Nations stopped to beat about the bush and take a stand against the pirates by providing armed guards.”
A ‘Hard Debate’ on combating piracy in an interactive discussion hosted by international journalist and BBC broadcaster, Nisha Pillai after the inaugural session left a lasting impression on the vast gathering. There was strong support to the suggestion by Capt M. M. Saggi Nautical Advisor to the government of India that instead of the 18 naval vessels trying to patrol the entire Indian ocean and the Gulf of Aden it would be more effective if they patrolled only the Somalian coast and searched every vessel coming in and out of Somalia. While there was a consensus on matters such as the need for the UN to step in, and adhering to the Best Management Practices (BMP3), the account given by Capt Makane whose vessel was attacked by the pirates despite BMP and his crew held hostage for seven and half months clearly indicated that BMP itself was not sufficient and deploying armed guards, at least three on each vessel, was essential.
In the session on ‘The rise in India’s international trade is set to impact world shipping’ India was indentified to be at an advantage because of various trends that were taking shape. Mohammed Al Muallem, Sr V. P. & Managing Director of DP World, UAE Region maintained that traditional trade flowing from Middle East to India was growing rapidly. Mark Williams, Research Manager of Braemar Seascope pointed to the shift in global refining capacity which was headed to the East and most refineries now finding base in Asia. The reason he stated was the high cost of refining in the Atlantic and American regions. Besides, such activity was subjected to tax. “The global oil business has changed to India’s advantage,” he reasoned.
In the discussions on the “Maritime opportunities in the Indian and the global oil and gas offshore sector “, speakers acknowledged the prevalence of a sense of optimism. There was a shortage of subsea vessels which were causing bottlenecks in the market. Besides new buildings were not delivered in time which was weakening the supply growth. However, there was a lot of growing opportunity in the offshore sector in India.
The session on “Port and Infrastructure development needed to meet the growth demand” clearly brought out a case for establishing transshipment hubs in India. But they required good connectivity to evacuate cargo, factor in economy of scale, proximity to main shipping lines, quicker handling and competitive cost. Presentations afforded close look at how some of the flourishing and efficient ports worldwide operated.
In the panel discussion on ‘Building for the future’ Raghavan Ashok, Country Manager of ABS put up a strong case for incorporating ship designs and adhering to operational changes. He explained how economical and regulatory challenges could be overcome and that ship building led to generating industrial growth. “Safety and quality are paramount to the growth of the Indian ship building industry,” he emphasized.
While Robert Allan, Executive Chairman of Robert Allan Ltd explained at lengths the types of vessels that found use for various types of cargo transport in coastal waters, Thomas Korsdalen, Managing Director of Middle East/India, Pareto Securities AS on the other hand highlighted the global ship building scenario especially of rigs.
One thing the India Shipping Summit 2011 has brought to the fore is that it is time for retrospection, reposition our strategy, select the best business model that best suits our objectives and get set to meet the challenges. It is not always that fortune comes knocking at our door.