India: Cabinet Approves Agreement On Coastal Shipping between India And Bangladesh

Market News

India: Cabinet Approves Agreement On Coastal Shipping between India And Bangladesh

India’s Union Cabinet, chaired by Prime Minister Narendra Modi has given its approval to the agreement on coastal shipping between India and Bangladesh to carry out coastal movement of goods between the two countries. For the Indo-Bangladesh coastal shipping, the River Sea Vessel (RSV) category of vessel has been agreed upon by both the countries.

Exim trade between India and Bangladesh would be benefited by way of reduction in freight charges. It will also improve the utilisation of port capacities of Indian ports and open up new opportunity for Indian coastal vessels. It will also help in decongestion of roads especially at the land custom stations/integrated check posts at the Indo-Bangladesh border.

The Indian ports serving as transshipment ports for Bangladesh cargo will derive benefits by way of enhanced throughput as a result of Indo-Bangladesh coastal trade.

India and Bangladesh shall render the same treatment to the other country's vessels as it would have done to its national vessels used in international sea transportation.

India's trade with Bangladesh has grown rapidly during the past few years. Bangladesh is now India's largest trade partner in South Asia. Currently there is no significant cargo movement between sea ports of Bangladesh and India as it is not profitable for the big ocean going vessels to operate between the sea ports of the two countries. Therefore, to reduce the cost of shipping operation, a lower but pragmatic standard of vessel known as River Sea Vessel (RSV) has been prescribed for coastal shipping. The RSV category has significantly lower construction and operation cost without compromising on the safety of the vessel.