The shipping ministry had opposed the government's plan to exit Shipping Corporation of India (SCI), citing the public sector carrier's strategic role, but agreed to the proposal after a discussion in a top-level panel.
At last week's meeting of the committee of secretaries (CoS), which recommended strategic sales of SCI and oil retailer BPCL, the ministry had flagged its concern, arguing that the company's fleet of vessels came handy in transporting oil, cargo and even passengers during a war or crisis, sources told.
But other members of the panel argued that several countries did not have a national shipping line and yet managed to perform the tasks in case of an emergency.
Besides, SCI can hardly do much in case of a war, members of the high-level panel are learnt to have said, countering the argument.
The shipping ministry had also pointed out that the Indian Navy did not have a vessel to ferry oil cargo and cited instances where SCI ships were used to transport oil during the war between Iraq and Iran in recent past as well.
They added the SCI ships have also been used in rescue operations and in one such case its tanker 'Desh Shanti' was involved in rescue of seven Indians in February 2017 in the Gulf of Oman. "But the CoS observed that there was no strong or convincing argument why Indian government needed to have a national shipping line. It was a collective decision to go for the stake sale. All issues raised in the meeting have been recorded. Now, it's for the Cabinet to take the final decision," said a source.