Domestic ships and PSUs to ink pact for 50% of imports

In a step to boost domestic firms like Shipping Corporation, the government is considering a proposal to make it mandatory that public sector undertaken (PSUs) engaged in import of commodities, including oil and coal, signs a five year contract with them for the inbound cargo.

The proposal, likely to be sent to cabinet “in a few weeks” time is in lines with nations like China, Japan and Korea to protect the domestic shipping industry. “An inter-ministerial group is at present considering the proposal that government PSUs, based on some international benchmarks, could give domestic shipliners contracts for cargo imports for five years,” an official source said.

The proposal involves giving 50% or more of the total cargo imports by oil, coal and steel etc PSUs to domestic shipliners, the source added. “The Indian shipping companies in turn, confident of the contracts at hand, could buy ships and increase the Indian tonnage. Five year contracts with PSUs would also provide confidence to the lenders to provide assistance to Indian companies,” according to the source.