Coal news and updates

Scope to hike share of merchandise trade in GDP

December 11: India has great potential to increase its share of merchandise trade in the GDP as its current proportion is only 42%, Minister of State for Shipping Pon Radhakrishnan has said.

“Presently, the shipping industry carries 95% of India’s total merchandise trade by volume and 70% in terms of value but the current proportion of merchandise trade is very low,” Radhakrishnan said in written reply in the Rajya Sabha.

He pointed out that India has a total sea-borne traffic of only 950 million tons (mt) with a total coast-line of around 7,500 km compared to China whose sea-borne traffic is 9 billion tons with a coast-line of 15,000 km.

“Therefore, India has significant potential of developing its maritime capabilities,” the minister added.

He said, in order to make the Indian shipping industry more attractive and competitive, it has been provided cargo support. This is presently being done through Right of First Refusal policy of FOB import for government owned/controlled cargoes.

In Union Budget 2014-2015, the government has increased the abatement of service tax from 50% to 60%.

“With this change, only 40% of the value of the service for transportation of goods by vessels is subject to a levy of service tax. The government has taken a policy decision to allow shipping enterprises based in India to acquire ships abroad and also flag them in the country of their convenience,” he said.

Recently, the government has exempted the customs and excise duty leviable on bunker fuels used in Indian flag vessels for transportation of EXIM and empty containers.