Fertiliser Transport to Get a Boost as Licence Norms for Foreign Vessels Eased

In a move aimed at benefitting farmers and removing transport bottlenecks for fertilisers, the government has done away with the licensing permits for foreign vessels transporting fertilisers.

The development assumes significance as a study under the government’s Sagarmala project indicates that movement of 6-7 million tonnes per annum (mtpa) of fertilisers via coastal shipping will save Rs. 800-900 crore. The decision comes after the government abolished the licensing requirements for foreign vessels transporting agriculture, fishery and animal produce, besides allowing Indian citizens to charter ships for these.

“There is a need to improve access to farm inputs such as good quality fertilisers and seeds in order to double farmers’ income,” a communique from Ministry of Shipping to DG Shipping said. “The desired improvement in access to inputs can be achieved by enabling transportation and logistics to be flexible and reliable for transporting goods within various parts of the country,” it added.

Accordingly, in exercise of the powers under the Merchant Shipping Act, now a foreign vessel is not required to obtain a licence from the Director General (DG) of Shipping for engaging in coasting trade of India, for carriage by sea of fertilisers, it said. The relaxation is subject to conditions like quantity of fertilisers should contribute to at least 50 per cent of the total cargo onboard the ship, it added.

As per the existing regulatory framework, a foreign ship can load cargo from one place of port in India and discharge at other place or port in the country only under a licence issued by the DG Shipping.

According to Shipping Minister Mr. Nitin Gadkari, a committee on doubling farmers’ income had called for a strategy towards enabling farmers to compete at a global scale and had highlighted unavailability of fertilisers in desired quantity. “Waterborne transportation has the potential of simultaneously reducing the per tonne km cost of transporting goods to one-sixth as well as reducing the greenhouse emissions per tonne km of transportation of long distances,” he said.

Shipping Secretary Mr. Gopal Krishna said the move will not only be a significant step in benefitting farmers but would also qualify for reimbursement of freight subsidy which will encourage the coastal movement of fertilisers, under the Nutrient Based Subsidy Policy.

He added that while rail is the primary mode of transport for long-distance fertiliser movement, various studies indicate that a modal-mix shift towards coastal shipping can significantly reduce costs.