Industry lead­ers argue that the crisis under­scores the urgent need for India to expand its national fleet. Anil Devli, CEO of Indian National Shipown­ers Asso­ci­ation, emphas­ised that a por­tion of crit­ical imports such as crude oil, LPG, coal, and fer­til­isers must be car­ried on Indi­an­flagged ves­sels. “Ships are needed today, not five or 10 years later,” he said, advoc­at­ing policies that encour­age the acquis­i­tion of second­hand ves­sels to quickly build capa­city.

A key struc­tural issue lies in how India con­tracts its imports. A large share of cargo cur­rently comes under Cost, Insur­ance, and Freight (CIF) terms, where the seller con­trols ship­ping. This lim­its oppor­tun­it­ies for Indian shipown­ers. In con­trast, Free on Board (FOB) con­tracts, where the buyer arranges trans­port, allow greater con­trol over logist­ics and sup­port domestic fleet growth.

Ideally, at least a por­tion of imports should be FOB and exports, CIF, for stra­tegic reas­ons. Des­pite earlier policy pref­er­ences for FOB imports, the trend has shif­ted toward CIF, said Mr. Devli. This has sig­ni­fic­ant fin­an­cial implic­a­tions, with mil­lions in freight pay­ments flow­ing over­seas.

A large share of cargo cur­rently comes under CIF terms, where sellers con­trol ship­ping

Cer­tain sec­tors high­light the imbal­ance. About half of India’s crude oil imports are on FOB terms and some 40% of LPG is car­ried by Indian flagged car­ri­ers. But fer­til­isers such as urea are almost entirely impor­ted under CIF con­tracts, leav­ing them depend­ent on for­eign ves­sels. Dur­ing crises, such cargo is among the first to face delays. Experts sug­gest that India should aim to carry at least 50% of its stra­tegic com­mod­it­ies — energy and food — on its own ships.

Former Dir­ector Gen­eral of Ship­ping Amit­abh Kumar said the pat­tern was pre­dict­able: whenever a crisis hits, global ship­ping capa­city tight­ens sharply.

This has dir­ect implic­a­tions for coun­tries like India. Low­mar­gin goods— par­tic­u­larly agri­cul­tural com­mod­it­ies—are often left behind, while high­value cargo such as elec­tron­ics con­tin­ues to move des­pite rising freight costs.

The impact is com­poun­ded by equip­ment short­ages and logist­ical bot­tle­necks.

Bey­ond eco­nom­ics, the crisis has also raised con­cerns about the safety of sea­farers. Thou­sands of Indian sea­farers are stran­ded on the ships stuck in the Per­sian Gulf. There have been cas­u­al­ties, too. 

Source: The Hindu 

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