MUMBAI: State-run national carrier Shipping Corporation of India Ltd (SCI) will form a joint venture with public sector oil and gas companies Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) to buy ships from local yards.
The planned joint venture aims to reduce dependence on foreign vessels, enhance India’s energy security, and support Aatmanirbhar Bharat initiative by prioritizing Indian-built ships.
Shipping Corporation of India will provide technical, operational, and regulatory expertise, while IOCL, BPCL and HPCL will ensure cargo commitment through long-term charter contracts.
Shipping Corporation of India signed a memorandum of understanding with IOCL, BPCL and HPCL at Bhavnagar on Saturday to pursue the joint venture, officials said.
The strategy seeks to cut outgo of foreign exchange in hiring foreign flag ships for Indian trade.
India’s annual shipping freight bill is estimated worth some $75-80 billion and a bulk of this is paid in foreign exchange as a large number of non-Indian ships are used by state-run firms for hauling the import cargo on Free-on-Board (FOB) basis in the absence of adequate Indian flagged ships.
The government had earlier entrusted IOCL with the task of acting as the common nodal agency to float tenders not only for its own requirement of medium range (MR) tankers but also on behalf of compatriots such as Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) for ease of execution of orders.
A plan to order 10 medium range oil tankers for state-owned oil companies did not make any headway despite a directive from the Prime Minister’s Office (PMO) to start the process by June this year.
IOCL delayed the tender process as the plan ran into opposition from the Indian National Shipowners’ Association (INSA), the local ship owners lobby group, who said that there were more than 30 MR tankers currently operating under the Indian flag which was adequate to meet the requirements of the oil companies.
