Shipping Corporation of India and Great Eastern Shipping Soar Amid Anticipation of Coastal Shipping Bill Approval
Shares of Shipping Corporation of India (SCI) and Great Eastern Shipping Company witnessed notable gains on the Bombay Stock Exchange (BSE), fueled by market optimism surrounding the anticipated approval of the Coastal Shipping Bill 2024 by the Indian government. The bill, which is expected to transform the maritime industry, was reportedly slated for discussion in today’s Cabinet meeting, sparking excitement among investors.
SCI’s stock climbed 4.6 per cent during the trading day, hitting an intraday high of ₹249.45, while Great Eastern Shipping Company saw its shares jump 2.58 per cent, reaching a high of ₹1,312. The year-to-date (YTD) performance of both companies reflects strong momentum: SCI’s shares have surged by over 51 per cent, and Great Eastern Shipping’s stock has risen by approximately 35 per cent so far in 2024.
This rally comes in the wake of a report by CNBC Awaaz, which suggested that the Indian government was on the verge of giving the Coastal Shipping Bill the green light. The bill, intended to simplify regulations in the shipping sector and enhance business activity at Indian ports, is expected to be presented to Parliament in the upcoming session. If it navigates the legislative process smoothly, the bill could come into effect within the next two to three months, sparking transformative changes in India’s maritime landscape.
Why the Coastal Shipping Bill is a Game-Changer for India’s Maritime Sector
The Coastal Shipping Bill 2024 is a critical step towards streamlining operations at India’s ports and encouraging greater participation in coastal trade. One of its key provisions is eliminating the requirement for Indian-flagged vessels to obtain trading licenses for coastal trade. This deregulation is expected to reduce bureaucratic hurdles and enable smoother access to Indian ports for domestic ships. Moreover, the bill aims to align regulations for international vessels operating in Indian waters with global standards, further enhancing operational efficiency.
For international vessels, this alignment means that ships bearing foreign flags will face simplified licensing procedures, making it easier for them to engage in coastal shipping activities in India. The bill is designed to boost India’s standing as a maritime hub by facilitating the easier movement of both domestic and international shipping traffic.
One of the most significant aspects of the proposed legislation is its focus on integrating coastal maritime transport with inland waterways. The government is keen on creating a favorable environment for shipping companies by reducing transportation costs and encouraging competition. This integration is expected to unlock new growth opportunities, particularly in the movement of goods between coastal regions and inland destinations. Additionally, the bill could introduce measures to increase the market share of Indian vessels in coastal shipping, further enhancing the country’s maritime infrastructure.
Boosting India’s Shipping Capacity and Employment
India’s shipping sector plays a pivotal role in the country’s economy. As the 16th largest maritime nation globally, shipping is the backbone of India’s trade, with 95 per cent of the country’s trade by volume and 70 per cent by value being conducted via maritime routes. The sector’s significant contribution has spurred the government to focus on enhancing its capacity, with ambitious targets to double container handling capacity within the next two years.
Shipping Minister Sarbananda Sonowal has highlighted plans to bolster India’s maritime industry. As part of the government’s broader vision, the establishment of shipbuilding and repair clusters in five key states—Gujarat, Maharashtra, Kerala, Andhra Pradesh, and Odisha—is on the horizon. These clusters will aim to create a more robust domestic shipping ecosystem, positioning India as a hub for shipbuilding, repairs, and maritime services.
The government’s initiatives are also expected to generate significant employment. According to official estimates, the maritime sector could create approximately 20 lakh (2 million) jobs in the coming years, offering a significant boost to coastal communities and the broader Indian workforce.
The Need for Separate Legislation on Coastal Shipping
India’s shipping industry has experienced substantial growth in recent years, necessitating tailored legislation to address the unique challenges of coastal shipping. The Ministry of Shipping has underscored the importance of having a separate legal framework to regulate coastal trade, arguing that a distinct policy will better cater to the sector’s needs.
Historically, shipping has been treated as part of a broader transport policy, but the rapid expansion of the sector has led to calls for a more specialized approach. The Coastal Shipping Bill is expected to address these concerns by providing a clear regulatory framework that promotes growth, encourages investment, and enhances operational efficiency. By removing regulatory bottlenecks, the bill aims to unlock the full potential of coastal shipping and drive sustained growth in the sector.
India’s Growing Maritime Presence
India’s maritime ambitions are not limited to coastal shipping alone. The country is the third-largest player in the global ship recycling market, a sector that has gained international prominence due to its environmental and economic benefits. With a growing focus on sustainability and circular economy practices, India’s ship recycling industry is poised for further expansion.
The country’s extensive network of ports is also a key asset in its maritime growth strategy. India has 12 major ports and 200 minor ports, making it a vital player in global trade. Jawaharlal Nehru Port Trust (JNPT) in Mumbai, the largest public port in India, and Mundra Port, the biggest private port, serve as critical hubs for the nation’s maritime activities. These ports handle a significant portion of India’s trade and are essential to the country’s economic infrastructure.
Looking Ahead: The Future of India’s Maritime Industry
The introduction of the Coastal Shipping Bill 2024 comes at a crucial time for India’s maritime sector. As global trade continues to evolve, the bill represents a forward-thinking approach to enhancing India’s competitiveness in the shipping industry. By reducing regulatory barriers and fostering greater integration between coastal and inland waterways, the bill could unlock significant growth opportunities for Indian and international shipping companies alike.
For investors, the bill’s approval could translate into long-term gains, as companies like SCI and Great Eastern Shipping stand to benefit from a more efficient and competitive maritime environment. As the bill progresses through Parliament and potentially comes into force, India’s maritime industry could emerge stronger, more agile, and better equipped to meet the demands of a rapidly changing global trade landscape.
With the government’s ambitious targets for container handling and employment generation, the future of India’s maritime industry looks promising, setting the stage for sustained growth in the years to come.
