The Port of Bombay is seeking government permission to levy all charges on vessels engaged in foreign trade in U.S. dollars instead of the local currency.
The move is intended to compensate for the falling value of the rupee against the dollar and pound sterling in the past year. While that would protect port revenues, there could be objections from foreign lines.U.S. representatives of lines offering service between the United States and Bombay said they would not be concerned about the currency move unless it amounted to a net increase in the charges.
The proposal was made by S.R. Kulkarni, a member of the Bombay Port Trust and president of the All-India Port & Dock Workers' Federation.
He and others argue that as freight tariffs are paid in dollars, port charges should be calculated on the same basis. The plan would cover port dues, composite pilotage, towage and berthing of vessels engaged in foreign trade.
Bombay port would exempt coastal ships and those carrying bilateral and chartered cargo.
If the government clears the proposal, it is likely other ports will follow. Mormugao, a port located in Goa, is already reported to have sent a similar proposal to the government.
Analysts note that under various international conventions, all ships are meant to be treated on a par in fixing charges and providing facilities. Reports say Japanese importers of Indian iron ore have protested against Mormugao's move.
Meanwhile, a committee of officials has begun reviewing the Merchant Shipping Act to see what changes can be made to update it, a senior official of the surface transport ministry told The Journal of Commerce.
One proposal is to allow bareboat chartering of foreign vessels by Indian lines. Carriers have been pressing governments for some years to allow such chartering, which is expected to increase ship capacity.
But the ministry official said Wednesday there are legal problems relating to registration, tax and other fiscal concessions.
The shipping act does not allow dual registration of vessels, for instance. Indian ships also get concessional treatment from the government in cargo movement.