A report coming from the Indian media says MSC Mediterranean Shipping Company is close to making a decision to reflag a few vessels under the Indian flag. The move would be in part to address pending changes in India’s shipping regulations and would provide the company with a potential competitive advantage in the growing market.
India has declared its intent to expand its national shipping capacities and reduce its dependence on foreign flag carriers. The government outlined an ambitious plan to build its shipbuilding industry into a world-class operation and is also moving to support the development of domestic carriers.
A report in ETInfra, from India’s Economic Times, says that discussions have been ongoing with MSC and that a decision could be made as early as next week. They expect CEO Soren Toft to announce the company’s intent to register containerships in India after a final decision by the shipowner.
India has been reaching out to the major shipping companies to develop opportunities for its shipping industry and its shipbuilders. There have been discussions with MSC, as well as CMA CGM and Maersk, about ship construction and repair in India.
CMA CGM was the first of the major container carriers to move forward, starting earlier this year. It reflagged its vessel CMA CGM Vitoria (2,592 TEU) to India in April and began recruiting Indian seafarers to meet the country’s staffing requirements. The company said it would reflag three additional containerships to the Indian registry, and ETInfra reports that the fourth ship will be reflagged this month. The company also highlighted that it recruited 1,000 Indian seafarers and plans to hire an additional 500 seafarers in 2026.
The French carrier reported last week that it has also signed a letter of intent to build six containerships in India with the Cochin Shipyard. The 1,700 TEU vessels will be LNG dual-fuel and fly the Indian flag.
Both companies are reportedly taking these steps to align with India’s maritime development strategy launched by Prime Minister Narendra Modi. ETInfra highlights the economic advantages the companies will also enjoy as the country moves to reform several of its key shipping polices.
Currently, India has just three containerships owned by the state-run Shipping Corporation of India, although the newspaper reports the company is pursuing the acquisition of two secondhand vessels. The newspaper reports that the government has instructed the Shipping Corporation and the Container Corporation (CONCOR) to develop a national Indian container carrier to further reduce the dependence on foreign-flag carriers.
India also created a regulation that stopped the flagging of vessels that are more than 20 years old. It was designed to support new shipbuilding and reduce some of the decrepit ships in the registry. ETInfra points out that by reflagging vessels to India, the foreign carriers would gain a five-to-10-year life extension for the vessels granted under the regulation.
They expect India will take steps to tighten its cabotage regulations for intra-India transport after relaxing some policies in 2018 governing transshipment, repositioning empties, and agricultural transports on domestic routes. Foreign carriers have been permitted to carry out these trades without a license. India is also expected to tighten its restrictions on vessel-sharing agreements among the large carriers.
The article does not mention it, but MSC has had a bit of a rocky relationship with India, and specifically the Kerala State, after the loss of the MSC Elsa 3 off the coast in May. The state and MSC are in court fighting over the compensation and damage claims from the recovery and clean-up efforts, as well as extensive compensation claims from the fishing communities and others. Several of the company’s vessels have been arrested and held for bonds in the related cases.
A move to register ships in India might help the company to quell some of the resentment that has developed after the loss of the vessel.
