Rs10,000 crore package for shipping industry on anvil

The centre is planning to provide a Rs10,000 crore relief package to the domestic shipping industry to help it tide over the global economic downturn.

''We know that the shipping industry in the country is facing difficulties. We are actively considering a package of Rs10,000 crore to help the industry. The government will also take note of other concerns of the industry,'' CBS Venkataramana, joint director general of shipping, said on Friday.

He was speaking at a seminar on logistics park organised by industry body CII in Chennai on Friday.

The shipping industry has been hit hard by the global financial tsunami as the decline in freight trade has left many ships idle. With credit lines frozen, several shipping companies have stopped taking delivery of new ships or have returned hired vessels. Some have even send their ships for breaking to avoid the huge cost of maintenance.

With the global recession taking a severe toll on trade and shipping, the Baltic Dry Index for dry bulk cargoes declined over 9,000 points – from 11,612 points it has fallen to an all-time low of 663 points in December.

''Logistics expenses dent a company's profitability. So, at present, because of the high cost of logistics services, consumers are paying more while producers are getting lesser profit on their merchandise.'' he told the conference.

''India's logistics industry is yet to be fully developed. Issues such as quality, pitfalls, coordination and development of logistics parks in the country need to be addressed,'' he said.