International shipping majors are making a beeline to register their ships under the Indian Flag.
Denmark shipping major A.P. Moller – Maersk (Maersk) is the latest with two of its ships – Maersk Vilnius and Maersk Vigo – having been re-flagged under the Indian flag in the last two weeks, said sources.
Reflagging refers to changing the nationality of the two ships – from Hong Kong registrations – and now will be governed by Indian laws, said sources. “Reflagging from international majors gives a major boost to Indian Registry, and indicates the trust they have on us,” said sources in DG Shipping.
At present, India’s fleet comprises about 1,600 vessels, with a gross tonnage (GT) of 14 million tonnes. India annually spends $75 billion on leasing global ships while owning about 2 per cent of the world’s total tonnage.
It all started In April with the French shipping giant CMA CGM reflagging one of its container ships – CMA CGM Vitoria – under the Indian flag. The vessel was previously flying under the Maltese flag and can carry 2592 twenty-feet long containers. The flagging ceremony follows Prime Minister Narendra Modi’s visit to the company’s headquarters during his visit to France.
Since then, CMA CGM had registered two more ships and the fourth will be done next week.
It is learnt that Switzerland’s MSC also plans to re-flag its ships under the Indian Flag and this will be known next week at the India Maritime Week to be held in Mumbai, sources in DG Shipping said.
Sources in DG Shipping said that Maersk has opened an office – Maersk Bharat IFC Pvt Ltd – in Gujarat International Finance Tec-City for re-flagging the ships.
The reflagging of Maersk’s ships comes after the company celebrated the name-giving of its newest dual-fuel methanol container vessel in Mumbai in February as a part of the vessel’s maiden voyage to India. The vessel, named Albert Maersk, is the eleventh vessel in Maersk’s fleet capable of operating on methanol.
By reflagging, ships are added to the Indian fleet. This ensures that Indian cargo is carried in Indian flag ships, which are available to overcome disruptions, in times of crises, and have uninterrupted supply chains. Freight revenue stays within the country instead of paying foreign shipping lines.
There are also economic benefits for Indian ship management companies that hire crew to work on board, and on port charges and and ancillary services. More jobs will be available for Indian seafarers on Indian flag ships, said sources.
Further, Indian flagged ships get priority to carry government cargo. “We expect more ships to be reflagged in future,” said sources.
