Japan’s Mitsui O.S.K. Lines expands Indian flag fleet with a Very Large Gas Carrier

MUMBAI: Japan’s Mitsui O.S.K. Lines, Ltd (MOL), the world’s second largest ship owner by fleet size, has added a Very Large Gas Carrier (VLGC) to the fleet run by its Indian unit, reinforcing a rising trend among foreign fleet owners to register some of their ships in the world’s fastest growing major economy.The 2010-built liquefied petroleum gas tanker named ‘Green Sachi’ and earlier flagged in Liberia was converted to the Indian flag recently and inducted into the fleet of MOL (India) Pvt Ltd, the ship owner said.MOL (India) runs 11 Indian flagged gas, product and crude tankers, making it the fourth largest Indian ship owner by fleet size. MOL (India), formed in the Domestic Tariff Area (DTA), is also engaged in car carrier transportation and ship management, further expanding its footprint in India.Separately, MOL has opened a unit – MOL Shipping IFSC Pvt Ltd - in the Gujarat International Finance Tec-City (GIFT City), India's first and currently the only International Financial Services Centre (IFSC) operating under the Special Economic Zone Act, for leasing and operating ships.

On April 28, Marseille, France-based CMA CGM S A, the world’s third largest container shipping line, converted one of its foreign flag container ships to the Indian flag, making it the first big global container carrier to register a container ship in India. The carrier is in the process of converting three more of its foreign flag container ships to the Indian flag.

The four container ships will be owned by CMA CGM’s Indian unit - CMA CGM Shipping Assets India IFSC Pvt Ltd – set up in the GIFT City.

On March 31, Oslo and New York-listed BW LPG Ltd, the world's top owner and operator of LPG vessels, including VLGC, said it will sell two modern VLGCs to its Indian unit – BW LPG India – in a deal worth $150 million.

The ship purchase will help BW LPG India - the largest owner and operator of Indian-flagged VLGCs – expand its fleet to nine LPG carriers.

Both MOL and BW LPG India have benefitted from a so-called right of first refusal (RoFR) available to Indian flag ships for moving state-owned cargo along with the subsidy given by the government to Indian shipping companies in global tenders floated by ministries, departments and Central Public Sector Enterprises (CPSEs) for importing some specified cargo.

Under the Cabinet approved subsidy scheme, Indian fleet owners get a 5-15 per cent extra on charter rates, depending on age slabs, on ships registered in India after February 1, 2021.

The government has budgeted a corpus of Rs 1,624 crore to be disbursed as subsidy for moving crude oil, LPG, coal, and fertiliser cargo for state-run firms, over five years till 2026, to boost Indian tonnage.