The BJP-led NDA Government has done away with a key condition — classification/ inspection of vessels by the International Association for Classification Societies (IACS) or Indian Register of Shipping (IRS) — and modified another related to insurance that its predecessor UPA had set to start coastal trading with Bangladesh.
Bangladesh had termed the conditions “stringent” and rejected it following which the project was shelved.The obstacles removed, the Governments of the two nations have now for the first time signed an agreement for commencement of coastal shipping between the ports of Bangladesh and eastern ports of India using River-Sea Vessels type-4. The overall logistics cost is expected to come down by about 25-30 per cent once the trade shifted to coastal transportation for moving goods.
The first condition warranted all Bangladeshi vessels earmarked for the service to be classed by IACS or be inspected by the (IRS) before starting services. The second condition was that Bangladeshi insurance companies providing cover for the ships must also register with Indian authorities.For the second clause, India and Bangladesh have agreed that coastal vessels from both the countries would buy an insurance cover for a limit of USD 10 million from their respective domestic insurance companies. The idea to start coastal trading between the two countries was first mooted under the UPA rule, but suffered a setback in January this year, after Bangladesh dubbed the twin conditions as being “too stringent.” “We are expecting to start the trial runs of the ships by October 14, this year. This will not just reduce transportation costs of cargo but will also improve help in boosting economies of the two nations,” said a shipping ministry official. “The ships will require only 2.5 metre draft and will be easily maneuverable at the ports. Moreover, the advantages of river-sea vessels are less pollution, fuel savings, and reduction of accidents,” said the official.
Both the countries have agreed to conform to using the standard River Sea Vehicles (RSV)- 4 for operating on the coastal routes between the two countries. The RSV- 4 ships are designed for use in all weather conditions. They are specifically designed for coastal transportation, as they can ply seamlessly from sea into inland waterways and vice versa.“River-sea vessels are proven models in many countries to move cargoes from minor ports to major ports. It seamlessly integrates seaborne trade from inland waters to coastal waters and vice versa,” said the official.
“India anyway has second largest coastline after the US. However, the traffic between the major and minor ports between these two territories is negligible so transfers will be safe,” he said. “It has been decided that Bangladesh would draw a draft agreement and Standing Operating Procedures on the basis of discussions between the two countries. They will then share it with us through diplomatic channels and we will then take it forward,” he said.
The first condition warranted all Bangladeshi vessels earmarked for the service to be classed by IACS or be inspected by the IRS before starting services
The second condition was that Bangladeshi insurance companies providing cover for the ships must also register with Indian authorities
For the second clause, India and Bangladesh have agreed that coastal vessels from both the countries would buy an insurance cover for a limit of $10 million from their respective domestic insurance companies