The Indian Shipping Ministry is considering a compromise formula to review the right of first refusal (ROFR) which is given to local fleet owners for carrying export-import (EXIM) and oil and bulk cargo owned by companies that are state-run.
According to local media, a ROFR is most probably to be maintained when state-run companies complete their shipping arrangements via a tender. Otherwise, the ROFR will not be applicable.
[smlsubform prepend=”GET THE SAFETY4SEA IN YOUR INBOX!” showname=false emailtxt=”” emailholder=”Enter your email address” showsubmit=true submittxt=”Submit” jsthanks=false thankyou=”Thank you for subscribing to our mailing list”]
In addition if the government or the public sector decide to hire ships on time-charter, ROFR will be retained. However, if they hire ships from the spot market or on voyage charter, ROFR will not apply.
Today, Indian shipping companies can match the lowest rate by a foreign flag state-run company tender. If they don’t the foreign flag ship with the lowest rate will be able to carry the cargo.
For this reason, India is reviewing current legislation, in order to bring Indian charterers on level terms with Indian ship owners, the government said.
Nevertheless, there are complaints that the government has not done enough to improve the Indian shipping industry, which is currently on the margins.
Namely, India fleet owners want the government to make Indian shipping competitive against foreign peers. In order to do that, the Indian National Shipowners Association said that they should be able to use Indian cargo as an incentive to attract flagging into India rather than allowing foreign flags to access Indian cargo. This can cause higher capacity, taxes and employment to Indian seafarers.