Global Ship Insurers To Meet Today On Premia

Global ship insurers are meeting in London tomorrow to decide on the war risk premium to be levied in the wake of the terrorist attacks in the US.

"We expect them to basically ratify the hike in the war risk premium after the attacks in the US. This premium has already spurted in the last fortnight," said Sudhir Rangnekar, director, Shipping Corporation of India (SCI).

Rangnekar was speaking to newspersons on the sidelines of a meeting in connection with the World Maritime Day.

During peace time a 0.0175 per cent premium is charged of the hull and machinery amount. However, this has increased to 0.025 per cent for ships operating to the Red Sea and 0.075 per cent to vessels plying on the West Asia-Gulf and Sri Lanka sectors.

Earlier, while delivering the keynote address at the meeting, the director-general of shipping, D T Joseph, called for the formation of a shipping industry body on the lines of the Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry. He suggested that the body should be christened the Federation of Indian Maritime Organisations.

This organisation should consist of all the representative interests of the shipping industry like ship owners, port trusts, the unions, state maritime boards, shipping agents, shipyards and transport operators, he said.

"If all of us come together at FIMO, we are bound to have some power and influence -- just at least as much as any other federation in India with which the finance minister interacts before he announces the Budget in Parliament. It is necessary to bring together the entire maritime sector to take stock of the situation in the country," Joseph said.

He also warned that if the tax regime in India for both ship owners and seafarers was not eased, the Indian fleet strength would be depleted by half in the next three to five years. He pointed out that Indian shipping companies pay the highest corporate tax in the world. In sharp contrast, 87 per cent of world shipping pays no tax, while 13 per cent pay only 1.5 per cent tax.