India’s Rising Shipping Volumes Are Welcome News For Investors

shipping port in indiaAs shipment volumes in India continue to rise sharply, driven by an increase in iron ore imports to China as well as the economic recovery in the United States and Europe, it would seem that the country’s shipping industry is finally beginning to show signs of a definite recovery. In the last two years, India’s shipping industry has been struggling with excess capacity and a crippling decrease in international trade. Therefore, any upswing in cargo traffic is welcome news for domestic shipping companies such as the Shipping Corporation of India, Great Eastern Shipping and Essar shipping. Furthermore, it is expected that this sudden increase in shipping volumes will attract international investors, hoping to capitalize on the nation’s recent growth spurt.

At the moment, exports in India have benefited from a revival in the global economy, which has been further encouraged by the weakening American dollar. In July 2013, exports grew by 11.6 per cent and 13 per cent in August 2013. Given these consistent growth figures, the Federation of Indian Export Organizations expects the number of outbound cargo shipments to increase by at least 16 per cent, by the end of the fiscal year.

Also of interest to investment-seekers is the fact that the charter rates for capsized vessels, such as panamax and supramax, experienced a notable rise in September 2013. According to Bloomberg data, the average charter rate of capsized vessels has increased approximately 25 per cent to $29,125 (September 2013). As China imports iron-ore from producers like Brazil and Australia, dry bulk trade is expected to continue to increase, which will further contribute to India’s rising shipping traffic.

As shipping volumes continue to rise in India, the shipping industry in the struggling South-Asian country will become more and more appealing to private investors, who are seeking profitable investment opportunities in the world’s emerging markets. As more investment capital begins to flow in from foreign investors, India will be able to facilitate the steady recovery of their shipping sector, which analysts agree has tremendous potential to deliver economic growth for the country and offers long term investment success for the investment community.

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