India Development News & Foreign Investment Opportunities

India-Indonesia need to build shipping link

Expert suggests Shipping Chamber


Expert suggests Shipping Chamber


Pelindo I

India and Indonesia need to upgrade current coastal vessel trade in the eastern Indian Ocean for which the two countries have initiated bilateral connectivity between the southern-most Indian islands and resource-rich northern Sumatra.

The shipping services, upgrading from coastal vessels by investing in bulkers, could have a start point with an India-Indonesia Shipping Chamber, suggested Siswanto Rusdi, founder and director of Indonesia’s National Maritime Institute.

Rusdi highlighted the importance of a shipping chamber after attending a panel discussion on ‘India and Indonesia in the Indo-Pacific’ which was jointly organized by two think tanks of National University of Singapore on 9 April 2019.

Both countries are working on connectivity between Andaman and other southern Indian Islands with northern tip of Sumatra where a deep-water port at Sabang offers the potential of setting up maritime industries as well as port upgrade, industry observers said.

Rusdi sees the urgency of starting a shipping chamber and has pointed out the Indonesian government’s ruling to ship exports on Indonesian-flag vessels, especially coal, most of which is shipped to India. The ruling is to be from 2020.

Though Indonesia has a large fleet of coastal vessels, it is short on bulk cargo carrying vessels, notably for plying trade in eastern Indian Ocean.

“With direct maritime/shipping connectivity, Indonesia and India can benefit each other,” said Rusdi, pointing out that the world’s bulker pool now is full of China’s vessels and shipping companies.

“Our countries must do something to balance it,” the Press Trust of India quoted Rusdi as saying on 12 April 2019.

Sabang is a small commercial port with moderate activities under the state-owned company Pelindo I, according to Rusdi.

But Sabang has the potential to be developed into a regional deep-water port without any extensive and costly dredging.

India, in need of as many deep-water ports as possible, is seen as a major player in upgrading Sabang, just as it has done so with Chabahar Port in Iran, a major transshipment hub to central Asia.

Rusdi said: “What we need is not only physical construction but more on the intangible one. We need industry to be set up in Sabang.”

“In the old time, Sabang was a free port with significant trading activities. India and Indonesia can revive it to the that initial position.”

He sees business-to-business approach in developing Sabang and huge business potential for shipping and maritime activities once developed.

The Singapore panel discussants noted Indian Ocean as peaceful region without any contested claims by littoral states. This is the most peaceful environment for trade and commerce development unlike the heatedly contested and claimed South China Sea.

The panel discussion was jointly organized by the Institute of South East Asian Studies/Yusuf Ishak Institute and the Institute of South Asian Studies of the university.

Leave A Reply

Your email address will not be published.