Coastal Shipping



  1. India has a long coastline of 5,560 Kms., having access to the sea on three sides with 11 major and 168 minor/intermediate ports. Major ports are directly under the administrative control of Central Government while minor/intermediate ports are managed and administered by the respective maritime State Governments. It is a well known fact that the shipping has always been regarded as an important transport sector of national activities in all maritime countries, and it is well suited for transportation of bulk cargoes at low cost. Coastal Shipping, as a complimentary mode of transport is not only an economic necessity but also a valuable asset in times of emergency.

  2. India lies in geographical proximity to important shipping routes which gives a natural advantage to the country's shipping. Moreover, shipping is no longer an isolated mode of transport but ferms a part of an intermodal transport chain linking other transport modes. National Shipping helps in making the country more self-reliant and provides the necessary strategy support in critical times. It also helps in extending the resource base of the country by enabling the harnessing of the wealth of the adjoining seawaters.

  3. National Shipping Industry also supports national ship-building, ship-breaking, ship-repairs and other ancillary industries and business, shipping, therefore, generates employment both directly as well as through a number of ancillary activities. Most of these industries are labour intensive and are, thus, especially relevant for India. To build Indian Shipping from scratch in the post independence period was a challenging task and the Government took several measures in this respect. The re-construction policy Sub-Committee on Shipping (1945) laid down the basic policy for the Shipping Industry. In 1958, the Shipping Development Fund Committee (S.D.F.C.) was set up to provide finance on easy terms for ship acquisition. Simultaneously in 1960 Transchart, a chartering organisation of the Government, was established to make shipping arrangements for Government Controlled cargoes and, while doing so, to give preference to Indian flag vessels if suitable Indian flag vessels were available at market rates.


  1. Establishment of transport network is an essential of infrastructure development. Inadequacy of transport can seriously affect the development process. Despite continuous efforts made since l95l to augment the capacity of various modes of transport, the transport sector, barring Railways and Road has been exposed to bottlenecks and capacity shortages inhibiting smoother and faster growth and economy. However, the established transport net work is facing serious bottlenecks in meeting the growing requirement of economy.

  2. Transport cost is part of the cost of production of the goods - and services and the objective is to bring this cost to the minimum so that the economy can derive maximum benefit.

  3. In choosing to establish a particular mode of transport in preference to others, the total resultant cost to the economy becomes relevant. Two parameters have been developed to measure the cost to the economy. These are (i) energy intensity factor and (ii) resource cost. Of the two the latter is more comprehensive. The energy intensity factor is relevant in the context of energy availability being on the downtrend. Further the cost of energy scaling new heights, optimal use of available energy is an inescapable economic determinant.

  4. To envisage Coastal Shipping as a means to remove the bottlenecks in the existing transport network would be taking a restricted view of the potentialities of Coastal Shipping, especially in a country like India, which is blessed with a very long coast line. India has to exploit this cheap mode of transport to her best advantage.

  5. The immediate hinterland for the Coastal trade comprises of 40 districts of five states on the west and four on the East Coast and Pondichery. The hinterland covers an area of over 3,80,000 sq.k.m. Lakshadweep and Andaman and Nicobar group of Islands in the Arabian Sea and the Bay of Bengal respectively also forms part of the Coastal hinterland. These islands covering an area over 8,300 sq.kms are essentially dependent on coastal shipping for movement of cargo and passengers, between these Islands and the main land as well as for inter-island movement. Some of the hinterland districts possess rich silica and minerals like bauxite iron-ore, manganese-ore and limestone.

  6. The distribution of minerals shows that there is a rich concentration of iron ore in Goa, in the Ratnagiri district of Maharashtra, the North Kanara district of Karnataka, the Calicut district in Kerala, Ongole district in Andhra Pradesh and Cuttack district of Orissa. Line stone is abundantly available on the coastal districts of Gujarat, Maharashtra and Orissa have rich deposits of bauxite. In view of the availability of rich minerals resources alone the coast, some of these districts are ideally suited for the development of extractive industries.  With growth of such industries there are potent for the growth of coastal trade in a big way in the long-term.

  1. The Shipping Corporation of India Ltd., is at present maintaining passenger line service between mainland and Andaman as well as Lakshdweep. Further expansion of shipping services to cater to the needs of Andaman group of islands and Lakshdweep will add new perspectives to the development of coastal shipping.

  2. The Pradhan Committee on Coastal Shipping had observed that while the major ports such as Calcutta, Haldia, Tuticorin, Madras, Cochin, Kandla, etc. would provide the main infrastructure for handling of the projected coastal traffic, a more systematic and planned effort would have to be made for greater utilisation available at minor ports. Such utilisation would in turn lead to improvement in the infrastructure and the handling facilities available at these ports and thus lead to further generation of coastal traffic, which could be moved by deployment of handy-sized vessels for parcels of appropriate sizes.

      1. The Indian coastlines are all set to witness a sea change. After years of stagnation in the coastal cargo movement a series of policy announcements made by the Government in the late eighties and early nineties seem to be paying off slowly.

      1. Already a number of corporate like Reliance Industries, Ambuja Cements, Narmada Cements, Magdaila Shipbuilding Yard, Vipul Ship Yard, Larson & Toubro Ltd., Essar Spong Iron Kribcho and NTPC (National Thermal Power Corporation) having their plants on the West Coast operating their own Jetties for their own cargo movement. Also a few more in the interiors also expected to join the Fray.

      2. As far as passenger traffic is concerned, it is concentrated, mainly between the mainland and Islands of Andaman, Nicobar and Lakshadweep. The growth in this traffic has been more or less steady. The ro-ro passenger service and the hover craft has been mooted since quite some time now, in pursuant to the idea mooted for introduction of ro-ro passenger service in this sector. An Indian Shipping Company has already introduced a Catamaran passenger service between Bombay & Goa from November, l994.


  1. The Government having recognised that coastal shipping is a very energy efficient and comparatively cheaper mode of transport, which could greatly relieve the pressure on rail and road transport, set up a working group in August 1992 under the Chairmanship of the Director General of Shipping consisting of members from different Ministries/ organisations to study the issues connected with the development of Coastal Shipping.

  2. The Working Group has made 12 recommendations, of which 11 have been accepted by the Ministry. Some of the recommendations pertain to the Ministry of Finance, one recommendation pertains to the Ministry of Petroleum and Natural Gas and another recommendation concerns to the State Governments and Planning Commission. The Directorate General of Shipping has already taken up these issues with the Ministry of Surface Transport with a request to take up this recommendation with the concerned Ministry/Department for expeditious implementation. So far as the Director General of Shipping is concerned, recommendation No. 8 pertains to the manning scale applicable to the Coastal Shipping for which action has already been initiated to amend Section 76 of the Merchant Shipping Act, l958.

    A Re-construction Policy Sub-Committee on Shipping appointed in l945 by the Government of India, made the main recommendation, namely, that the entire coastal trade should be reserved for Indian Shipping. But in practice, no cargo support is extended to the coastal Shipping in line with cargo support extended to by major maritime nations to their national flag ships. According to a recent survey, 37 maritime countries provide cargo support. About 40% of all the cargo carried by US Ships was preference cargo made available under US regulations.  Japanese Steel Industry controls about 200 million tons of cargo per year and most of this cargo is made available for carriage to Japanese shipowners. Chinese and EEC Steel Industries also exercise control over shipment of large volume of cargo through Free on Board terms of purchase. In many developed countries, the right to channalise cargoes to shipping lines of their choice is retained through control over terms of shipment, buying free on Board and selling on Cost Insurance and Freight.

    The Indian Shipowners and Shippers may like to make immediate efforts for transportation of goods by inland water ways instead of by road, in view of the overall increase in vehicle on National High-ways which has lead to high density of traffic, excessive fuel consumption due to poor maintenance and tremendous increase in the accident rate as well as pollution. This is very important in view of the fact that the Government of India had introduced a new subsidy scheme for transportation of goods by inland waterways to reduce congestion and pollution on National Highways.

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