India starts new cargo shipping service to Maldives to boost the trade

MCP LINZ – 1st vessel sailed from India to Male on 21 Sept. from Tuticorin 

By Dr. Sham Choughule 

Background

India and Maldives are traditional trading partners. Both countries are members of the South Asian Association for Regional Cooperation (SAARC) and cooperating. 

India and Maldives have signed a memorandum of understanding In June 2019 to start a direct passenger-cum-cargo ferry service to transport of goods and passengers. Accordingly, Shipping Corporation of India has started new cargo service from 21 September 2020 to support import and export from both countries. This maritime connectivity will help to further tie up in economic, social and cultural growth between these two nations.  

New shipping service

 The SCI has started this service from (Thoothukudi) Turicorin to Male via Cochin port. The container cum break-bulk vessel will carry 380 twenty-foot equivalent units (TEUs) with 60 refer plugs and 3,000 metric tons of breakbulk cargo. It is expected to reach Kochi on 22 September and will be formally flagged off on 23 September and reach Male on 26 October. This ship will have a round voyage of 14 days.

During its maiden journey, the ferry will make a stop at Kulhudhuffushi port in North Maldives, before it reaches Male on 29 September.

Cargo generating areas

Apart from Tuticorin itself, the export cargo will come from Beypore and Azheekal ports to Kochi by road and then by sea to Maldives. Also, large-scale exporters from ports such as Kandla on the west coast to Mali via Kochi are expected. The vessel can carry all types of commodities such as electrical machinery, furniture, pharma products, etc. along with perishable goods

Bilateral trade 

India is Maldives’ 4th largest trade partner after UAE, China and Singapore. Indian imports from the Maldives primarily comprise scrap metals. India accounts for only 9.7% of the Maldives’s total imports, so there is a huge opportunity for Indian traders. The Maldives is a 100% import-dependent country. Thus improved connectivity between India and Maldives will help boost bilateral trade. 

Indian exports to the Maldives include a variety of engineering and industrial products like drugs and medicines radar apparatus, rock boulders, aggregates, cement and agriculture products like rice, spices, fruits, vegetables and poultry produce, etc.

The Indian export cargo would include electrical machinery and equipment, white goods like televisions and home appliances, drugs, steel products, construction material, sand, garments and textiles, bathroom fittings and furniture and perishables, including fruits, vegetables, eggs and food grains, India’s bilateral trade with the Maldives has hovered around $ 280 million annually for some years now and stood at $ 286.85 million in 2019.

Indian ports gateway to the Maldives

Besides the expansion of markets for MSMEs in India, the Cargo Ferry service will provide an opportunity to Maldivian exporters of tuna and other marine products to scope the vast Indian market and springboard to Europe through Cochin and Tuticorin ports. For instance, Cochin Port has weekly connectivity to Europe through a 6500 TEU vessel. Cochin port will help to Maldives exporters to ship their goods to European destinations and Tuticorin port will help them to reach Asian/Far East destination. Male may not be depending upon Colombo as transshipment hub port. 

Sector for investment

The State Bank of India has been playing a vital role in the economic development of the Maldives since February 1974 by providing loan assistance for promotion of island resorts, the export of marine products and business enterprises.

Taj Group of India runs Taj Exotica Resort & Spa and Vivanta Coral Reef Resort in the Maldives. In November 2010, GMR Infrastructure (India) and KLIA (Malaysia) consortium took over the Male International Airport on a 25-year BOT contract to renovate and expand the largest and most important airport in the country. 

Earlier, in November 2009, Suzlon Energy of India signed an MoU to set up a 25 MW wind farm at an investment of $ 40 million in the Southern Province of Maldives. The Shri Educare of Delhi signed an MoU to take over the management of Ghiyassudin School, the first such initiative under the privatisation policy of the Government of Maldives.

In July 2010, Bommidala Infrastructure of India signed an agreement for 25 MW solar energy project in the Upper Southern province. Other proposals in the area of education, renewable energy, health and waste management are also under active consideration. India is investing in ports – constructions-cities-cancer hospital. 

There is a lot of opportunity in Tourism, fishing-real estate, textile, medicine, etc. India has given $ 40 million Line of Credit for Housing Sector which helps to Indian construction companies to land in the Maldives. 

India is eyeing on tourism sector of Maldives

According to Indian Deputy High Commissioner Rohit Ratheesh, the new cargo ferry service would bring about a major change in trade relations between India and the Maldives.

(The writer is Director, Logistics and Maritime Transport, Association For Global Economic Development.)