Exporters Raise Alarm on Shipping Costs and Scheme Shortcomings

Indian exporters have raised significant concerns regarding the rising charges imposed by shipping lines and the shortcomings of the Export Credit Guarantee Corporation (ECGC) scheme. During a meeting with key officials, they highlighted issues such as the shortage of bunker oil at major ports and the lack of transparency in shipping costs. Exporters are urging the government to implement measures to alleviate these challenges, particularly in light of the ongoing West Asia crisis.

Concerns Over Shipping Charges

At a recent meeting attended by commerce secretary Rajesh Agrawal and shipping secretary Vijay Kumar, exporters voiced their frustrations regarding the fees charged by shipping lines. They reported that these companies are not passing on the benefits of reduced charges or waivers in a clear manner. A prominent exporter noted that shipping firms are demanding upfront payments, with promises to adjust these costs later. Ajai Sahay, the director general of the Federation of Indian Export Organisations (FIEO), emphasized that exporters should receive these benefits immediately rather than having to wait for adjustments.

In response to these concerns, the Directorate General of Shipping has been working to address the issues raised by exporters. However, exporters pointed out that the government has limited control over foreign shipping lines. On the previous day, port authorities were instructed to ensure that concessions for cargo bound for the Gulf are passed on to exporters without delay. Mukesh Mangal, additional secretary in the shipping ministry, reiterated the need for immediate relief, stating that terminal operators should not delay the passing of concessions related to various charges.

Shortage of Bunker Oil

Exporters have also reported a critical shortage of bunker oil at key ports, including Paradip and Haldia. This shortage is impacting their ability to operate efficiently and meet shipping schedules. The exporters are calling for the government to ensure adequate supplies of bunker oil to facilitate smoother operations at these ports.

Pankaj Chadha, chairman of the Engineering Export Promotion Council (EEPC) India, highlighted logistical challenges faced by exporters. He noted that shipping lines are picking up cargo destined for Dubai from ports like Kochi but are not returning to collect cargo or cover transport costs for goods left at other ports. This situation is causing significant disruptions for exporters who rely on timely shipping to maintain their business operations.

Issues with the ECGC Scheme

In addition to shipping concerns, exporters have expressed dissatisfaction with the ECGC scheme introduced by the commerce department. They argue that the requirement for payments to be linked to the realization of export proceeds could hinder the scheme’s effectiveness. Exporters are advocating for the extension of benefits to goods shipped via ports in Egypt, Jordan, and Sudan, as they believe this would enhance the scheme’s utility.

The ECGC scheme was designed to provide financial support to exporters, but many are worried that its current structure may not adequately address their needs. They are urging the government to reconsider the payment linkage and to broaden the scope of the scheme to include more international routes, which would help facilitate smoother trade operations.

Challenges in Packaging Material Supply

Another pressing issue for exporters is the rising cost and limited availability of packaging materials. During a separate meeting, AEPC secretary general Mithileshwar Thakur pointed out that prices for plastic packaging have surged by up to 50%, while glass prices have increased by 8-20%. These price hikes are attributed to “artificial shortages” caused by stockpiling and disruptions in supply chains, particularly due to the ongoing conflict in Iran.

Exporters are calling for duty exemptions on certain packaging polymers to alleviate the financial burden caused by these rising costs. They believe that addressing the packaging material issue is crucial for maintaining competitiveness in the global market. As the situation evolves, exporters are hopeful that the government will take swift action to address these challenges and support the industry during these turbulent times.

Observer Voice is the one stop site for National, International news, Sports, Editor’s Choice, Art/culture contents, Quotes and much more. We also cover historical contents. Historical contents includes World History, Indian History, and what happened today. The website also covers Entertainment across the India and World.

Follow Us on Twitter, Instagram, Facebook, & LinkedIn