India’s sole long-haul liner operator, Shipping Corporation of India (SCI), is working to make up lost ground as the nation’s export prospects improve in the face of Asia’s trade diversification. In order to strengthen operations that have been severely limited by tonnage issues and government divestment initiatives, the 63% state-owned carrier hopes to purchase up to six used containerships, ranging in size from mid-size to ultra-large.
The action was taken after the national carrier, which had previously collaborated with MSC in this market, introduced one 9,000-teu ship to the India-Europe traffic. The market speculated that SCI was considering possibilities to enter the India-US east coast trade via a VSA agreement with one of the shipping networks, more likely ONE’s independent WIN service. SCI’s acquisition requirements include 12,000–18,000 teu vessels that are no more than 15 years old.
However, a lack of capacity required for a weekly rotation has made WIN sailings shaky. Indeed, because of the Red Sea-related diversions from the Suez Canal, the availability of tonnage has been a significant industry concern. However, with the recent peace between Israel and Hamas, canal transits may resume, which might free up a significant amount of tonnage for charter or purchase.
Due of foreign mainline carriers’ near-monopoly in the industry, exporters have recently put a great deal of pressure on Indian trade regulators to address a number of supply chain issues. According to trade associations, when supply-demand dynamics change, Indian exporters are consistently subjected to exorbitant freight costs and unpredictable vessel space.
The Federation of Indian Export Organisations (FIEO) noted recently that if the flag-carrier liner could gain a bigger share of the India trades, it would reduce arm-twisting by foreign shipping lines, particularly of our micro-small-to-medium enterprises.
It refocuses on the container shipping market, albeit on a limited scale, seems to have yielded some profit gains for SCI, according to the latest earnings report, which shows the carrier ended H1 of fiscal 2024-25 with a 145% increase in net profit. And income from liner operations soared to some $60m, from $34m in the previous H1 period.
However, much of SCI’s liner goals could depend on its ability to recreate consortium partnerships with the major carriers, as standalone operations are typically a difficult task. And its box trade push comes as ocean rates continue to move south, with expectations of a sharper collapse with Red Sea shipping resumption.
SCI was offered for sale in 2019, as part of New Delhi’s broader divestment programme intended to raise additional resources and monetise underperforming public assets. But the process has been painfully slow because of regulatory and due diligence hiccups, with no concrete timeline to when SCI would be fully privatised.
