Abstract
India’s Planning Commission looked increasingly unlikely to reach
ambitious targets for the expansion of
its national commercial shipping
fleet, according to a report from The Economic Times (ET) at the end of
April. BMI notes that India’s shipping industry is less developed than
those of many other nations in the
Asia Pacific region, and it looks
unlikely to make any great advances in the short term. The Planning
Commission hopes to increase India’s fleet to 12mn gross tonnes by 2012
in order to maintain the 14%
share of domestic shippers currently
operating on India’s international trade routes. According to the
ET,
the fleet totalled 9.28mn gross tonnes as of April 2009, indicating
that an additional 2.7mn gross tonnes
would be needed between 2009 and
2012 to meet the target. The ET suggests that such an increase is
unlikely
given that the country’s fleet increased by just 130,000 gross tonnes in
2007 and 400,000 gross
tonnes in 2008, while it decreased by 27,000 gross
tonnes between January and April 2009. Meanwhile,
the country’s
largest shipping line, state-owned Shipping Corporation of India (SCI), has
been forced to
scale back a five-year US$4bn fleet expansion programme due
to a funding shortfall. BMI notes that
India’s shipping fleet, which
totalled 501 vessels in 2008 according to the CIA World Factbook, ranks
behind that of neighbours Indonesia, Japan and South Korea. Moreover, the
average age of the fleet is
thought to be considerably above those of its
neighbours, with the ET estimating the average age of an
Indian ship at 18
years.
BMI’s India Freight Transport Report concludes that the
country will reach average annual freight-traffic
growth of 7.6% in the
2009-2013 period across all freight modes. In spite of the global economic
slowdown in 2009-2010, we still see a solid foundation for freight-transport
industry growth. We have
adjusted some of our mode-specific freight
turnover forecasts. On the shipping side, we edged down the
forecasts to
take account of lower growth in world trade. We have also reduced the
airfreight forecast, in
view of the fall in demand and financial
difficulties faced by the industry.
According to our latest estimates,
transport and communications GDP rose by 7.0% in 2008, 0.7
percentage
points faster than overall GDP, which we estimate to have increased by 6.3%.
For the 2009-
2013 forecast period, we expect the transport and
communications sector to continue outpacing the
economy as a whole by a
small margin. We forecast that the sector will achieve average annual growth
of
6.6%, versus 6.5% for overall GDP. The total value of transport and
communications GDP will rise to
US$152.2bn in nominal terms by 2013,
representing 7.7% of India’s GDP.
| 
View Cart
