Indian Exporters Voice Concerns Over Shipping and ECGC Scheme
Indian exporters have raised significant concerns regarding charges imposed by shipping lines and gaps in the ECGC scheme during a meeting with government officials on Thursday. The discussions, held with Commerce Secretary Rajesh Agrawal and Shipping Secretary Vijay Kumar, focused on the ongoing West Asia crisis and its impact on trade.
Shipping Line Issues and Bunker Oil Shortages
Exporters complained about shipping lines not transparently passing on benefits from lower charges or waivers. A leading exporter noted that companies are demanding upfront payments with promises of later adjustments, a practice criticized by FIEO Director General Ajai Sahay, who emphasized that benefits should be provided immediately. Additionally, exporters highlighted shortages of bunker oil at key ports like Paradip and Haldia, urging for adequate supplies to ensure smooth operations.
While the Directorate General of Shipping attempted to address these concerns, exporters pointed out that the government has limited control over foreign shipping lines. In response, the shipping ministry instructed port authorities on Wednesday to ensure that concessions for Gulf-bound cargo are passed on transparently and without delay. Additional Secretary Mukesh Mangal stated that terminal operators must not charge exporters and later reimburse them, as this delays relief efforts.
Logistical Challenges with Cargo Handling
EEPC India Chairman Pankaj Chadha reported logistical issues where shipping lines are picking up Dubai-bound cargo from ports like Kochi, only to return it to another Indian port without addressing requests for redirection or covering transport costs. This has added to the operational burdens faced by exporters.
ECGC Scheme and Packaging Material Woes
Exporters also flagged problems with the ECGC scheme announced by the commerce department. They argued that linking payments to bank realization of export proceeds could render the package ineffective. Furthermore, they demanded that benefits be extended to goods transiting through ports in Egypt, Jordan, and Sudan to enhance coverage.
In a separate meeting chaired by Agrawal, AEPC Secretary General Mithileshwar Thakur highlighted severe shortages and price hikes in packaging materials. He noted that plastic material prices have surged by up to 50%, while glass prices are 8-20% higher, partly due to stockpiling and the conflict in Iran. Thakur suggested duty exemptions for certain packaging polymers to alleviate these shortages.
Overall, exporters are calling for immediate government intervention to address these multifaceted challenges, ensuring that trade flows remain uninterrupted amid global uncertainties.
