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India unlocks its trade potential with Central Asia through Chabahar Port

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India unlocks its trade potential with Central Asia through Chabahar Port. Image: Pixabay
India unlocks its trade potential with Central Asia through Chabahar Port. Image: Pixabay
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The Union Minister of Ports, Shipping & Waterways and Ayush, Sarbananda Sonowal affirmed India’s commitment towards unlocking the trade potential with the Central Asian region through the use of Chabahar Port in Iran. On the occasion of ‘Chabahar Day’, Union Ports, Shipping & Waterways Ministry along with the Indian Ports Global Ltd. which was formed to participate in Shahid Behesthi Port at Chabahar development project, organized a conference in Mumbai, where the Union Minister Shri Sonowal and the Minister of State for Ports, Shipping and Waterways and Tourism Shri Shripad Yesso Naik interacted with the high level diplomatic delegation from Central Asian Countries.

Shri Sonowal also said, “Our vision is to make Chabahar Port a transit hub under the International North-South Transport Corridor to reach out to CIS countries”. “Chabahar Day” is celebrated to mark the beginning of INSTC – an Indian vision to economize movement of cargo between India and Central Asia. The Chabahar Port located in Iran is the commercial transit centre for the region and especially Central Asia.

Speaking at the event, the Union Ports, Shipping and Waterways Minister said, “The idea of INSTC via the vibrant Shahid Beheshti Port at Chabahar in Iran is an idea to connect the two markets using a multi modal logistical corridor”. This will rationalise our logistics cost which will contribute towards the trade volume between the two regions, he said. Thanking all the stakeholders’ who have shown active support for the development of the Chabahar Port, he said, through combined efforts, a point of connectivity enhancing trade and commerce among India and Central Asian countries has been successfully developed.

Shri Sonowal further said, Chabahar Port links the rich Central Asian region with the South Asian markets. It has emerged as significant for trade, economic collaborations and connecting people between the two geographies. Owing to the potential of the Central Asian markets, the India-led connectivity has provided a secure and commercially viable access to the Indian Ocean region for Central Asian countries. This link will not only provide connectivity, but also drive investments further supporting our cultural and political ties, he added. It will additionally develop the transit and transport potential of the Central Asian Region and improve their logistic network, he added. Chabahar Port will lead to promoting a joint initiative to create a regional and international transport corridor over there, said the Minister. Further, the aim is to develop universally recognized international norms, good governance, rule of law and equality at Chabahar Port, said the Minister.

Shri Sonowal also said that loading and unloading capacity of the Shahid Beheshthi Port at Chabhar which today stands 8.5 million tonnes, will be enhanced to 15 million tonnes on completion of the Phase I of the project.

Welcoming the Central Asian countries to use the services of Shahid Beheshti Port for facilitating their trade with India and other external markets, Shri Sonowal urged all stakeholders to provide suggestions on promoting Chabahar INSTC Link to further reduce the transportation time, open a shorter, faster and more reliable route from India to Central Asia and increase the feasibility of hassle-free trade between the two regions. “I would like to take this opportunity to request all of you to take this message ahead to make your business community aware about the opportunity and potential that this route may unlock”, said Shri Sonowal.

MoS Shri Shripad Yesso Naik said that, in the coming years, developments in the Shahid Beheshti Port will support the faster growth of business and raise standards of living in the region. This infrastructural linkage would lead to expansion of trade and investment prospects in the region, he added. “This trade meet will have to create opportunities through Shahid Beheshthi Port and help it grow more in the maritime sector”, Shri Naik stated in the conference.

During the event, the delegates from the Central Asian countries highlighted how Chabahar link with INSTC can play a vital role in boosting EXIM trade in their regions and its potential to further boost development in the landlocked countries. During the day-long event, several presentations & Govt to business sessions took place. Presentations & speeches were given by Chairman IPA, MD IPGL, FFFAI & Joint Secretary, Ministry of External Affairs, Govt of India.

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Maritime

AD Ports Group sign key strategic agreements with Angolan organisations

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AD Ports Group sign key strategic agreements with Angolan organisations. Image: Unsplash
AD Ports Group sign key strategic agreements with Angolan organisations. Image: Unsplash
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AD Ports Group has continued its sustained strategy of global expansion, signing key strategic agreements with Angolan organisations to enhance maritime connectivity along Africa’s west coast.

In the presence of Sheikh Shakhbout bin Nahyan Al Nahyan, Minister of State during Abu Dhabi Sustainability Week 2023, AD Ports Group entered into a framework agreement with the Ministry of Transport of the Republic of Angola to begin collaboration on the development of maritime services and infrastructure across the country.

The Group has also entered into a Head of Terms agreement to form a joint venture with state-owned logistics and transportation company UNICARGAS, which manages the multipurpose terminal at the Port of Luanda, Angola’s busiest port that handles more than 70 percent of the country’s international imports and 80 percent of its non-petroleum exports.

The new joint venture, with majority ownership by AD Ports Group, will work to modernise, manage, operate the multipurpose terminal and the logistic business of UNICARGAS.

Areas highlighted under the strategic framework agreement with the Ministry for potential future joint investment and development include ferry and cabotage services, maritime passenger terminals, and logistics platforms, as well as a Maritime Academy in Angola. The framework agreement also covers plans to consider development of the Caio Deepwater Terminal at Cabinda Port, located in Angola’s oil-rich northwest region.

AD Ports Group’s new agreements in Angola have the potential to significantly boost the country’s maritime industry. With Angola’s oil and gas sector contributing approximately 50 percent of the republic’s GDP, and 90 percent of exports, the energy sector in particular is likely to benefit considerably from improved connectivity.

Capt. Mohamed Juma Al Shamisi, Managing Director and Group CEO, AD Ports Group, said: “Our collaboration with the Republic of Angola demonstrates AD Ports Group’s commitment to supporting the UAE’s strong and evolving relationship with Angola in line with the directions of our wise leadership.

“We are focused on building fast and efficient maritime trade routes, and we are pleased to bring our robust knowledge base to Angola and the ports located on Africa’s west coast. These agreements reflect the trust the Ministry of Transport and the team at UNICARGAS have placed in us, and in our ability to contribute to Angola’s economic growth plans.”

Ricardo Viegas D´Abreu, Minister for Transport of the Republic of Angola commented: “The development of the Republic of Angola’s port infrastructure is a key priority of our 2023-2027 National Development Plan. Modernising our port infrastructure is a vital step for Angola to maximise the potential of our natural resources and promote economic growth for the benefit of our people. We are delighted to enter into the framework agreement with AD Ports Group and to benefit from its established knowledge and expertise as a global maritime player.”

Mohamed Eidha Tannaf AlMenhali, Regional CEO – Africa, AD Ports Group, said: “We are pleased to participate in the new joint venture to enhance and operate the multipurpose terminal at the Port of Luanda, leveraging the expertise we have developed at ports in the UAE and wider region. Working with UNICARGAS, we see significant opportunities to increase efficiency and boost capacity, deploying the latest innovations to enhance service levels and turnaround times.”

Joaquim Nazaré Pimentel da Piedade, Management Committee Coordinator, UNICARGAS, said: “Our aim is to develop a state-of-the-art multipurpose terminal to enhance the Port of Luanda’s position as Angola’s busiest port, to accelerate trade flows and contribute to economic growth. We are delighted to work with AD Ports Group, which has the technical and operational expertise to take services at the terminal to the next level.”

Angola is considered the sixth largest economy in sub-Saharan Africa, with a GDP of US$ 74 billion. Well positioned to benefit from increased maritime trade, the Republic of Angola offers 1,600km of Atlantic Ocean coastline, with five major operational ports, located at Luanda, Cabinda, Lobito, Soyo, and Namibe.

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Container Shipping Lines

Xeneta forecasts “extremely challenging” 2023 for the ocean freight market

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Xeneta forecasts “extremely challenging” 2023 for the ocean freight market. Image: Pixabay
Xeneta forecasts “extremely challenging” 2023 for the ocean freight market. Image: Pixabay
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After over two years of rising rates and overstretched capacity, the rapidly cooling ocean freight market looks set for an “extremely challenging” 2023, according to Oslo-based Xeneta. An in-depth analysis of the latest real-time ocean and air freight rates, combined with expert trend forecasts, suggests that ocean cargo volumes could fall by up to 2.5%, rates will drop “significantly” and weak demand will force increased idling of vessels. The air freight market, analysts predict, will also face a turbulent twelve months.

Out of balance

From climbing to historical highs during the global pandemic, ocean freight rates have fallen away – and in the case of spot rates, dramatically so – since the summer. Xeneta’s market report, built on the foundation of the team’s crowd-sourced data from leading global shippers, suggests there’ll be no change in course for 2023, with challenging macroeconomic and geopolitical outlooks undermining confidence.

Xeneta CEO Patrik Berglund says difficult times await stakeholders right across the ocean and air freight value chain.

He notes: “The cost-of-living crisis is eating into consumer spending power, leaving little appetite for imported, containerized goods. With no sign of a global panacea to remedy that, we’d expect ocean freight volumes to drop, possibly by around 2.5%. That said, if the economic situation deteriorates further, it could be even more.

“Allied to dropping volumes, we have a growing world fleet, with a nominal inflow of 1.65m TEU of capacity. Some demolitions will dent that growth, but we still expect an increase in capacity of 5.9%. Even if demolitions double from our current level of expectations, the industry would still be looking at an almost 5% expansion.”

Long-term woes

The upshot of that, Berglund explains, is overcapacity, necessitating an increased idling of assets. From a current position of “next to nothing,” Xeneta forecasts idling of up to 1m TEU – “maybe even more,” says the CEO.

This cocktail of weak demand, dropping volumes, and an increase in capacity will, inevitably, impact negatively on rates, says Berglund. He comments:

“We expect to see significant reductions. Carriers have proved adept at protecting and elevating rates during COVID, but with too much capacity and easing port congestion on most major trade lanes, they’ll be fighting losing battles in 2023. We could see spot rates on some key corridors drop below pre-pandemic levels during the first half of 2023, while long-term rates will fall rapidly as older, expensive contracts expire, and new, far lower contracts are signed. However, long-term rates will not drop below spot rates during the first half of 2023.

“As far as upcoming contract negotiations go, it’s imperative to keep an eye on the very latest market data to obtain optimal value. However, those talks will be difficult for all parties. The carriers will be desperate for volumes, but, at the same time, the shippers won’t have the high volumes that unlock the best prices. What we might see is that Freight Forwarders are the big winners, as they can find a sweet spot, serving the SMEs while playing the short market against carriers. Regardless, there’s both opportunity and challenges ahead, in the short- and long-term.”

Fasten your seat belts

One area where the ocean freight market may benefit is from a potential reduction in air freight. Xeneta says this segment faces a “bumpy ride” as lower ocean costs and better-scheduled reliability (from easing port congestion and available capacity) may tempt some shippers to make a modal shift. In a climate of increasing environmental awareness, shippers focused on sustainability may also be tempted to switch ‘general’ cargoes from the skies to the waves.

“To be fair, a shift in general volumes wouldn’t be too significant for the ocean freight carriers, but it would strongly impact on the air segment, where cargoes are obviously far smaller.”

Berglund adds that increasing ‘belly’ capacity, with easing travel restrictions, will be supplemented by the arrival of conversion and freighter orders placed during the air cargo peak. This will lead the air segment to join its ocean freight sibling in the overcapacity corner, with, he notes, “a negative impact on load factors and rates.”

Certain uncertainty

In conclusion, the Xeneta CEO underlines the complexity of challenges facing the industry, with economic uncertainty, geopolitical concern, ongoing industrial action on logistics chains, China’s continued zero-COVID policy and the combination of weak demand, easing congestion and increased freight capacity.

“I’d like to wish everyone a Happy New Year in advance, but there’s not that much for the industry to look forward to at present,” he states. “However, as we’ve seen over the past couple of years, predictions are almost impossible to make in a world that moves ever-faster, so there may be unknown factors waiting in the wings to influence markets.”

He continues: “For example, what happens if the Ukraine-Russia war comes to an end sooner rather than later? This could drive down certain costs again, giving consumers a positive boost. However, on the flip side, it’s important to always stay ‘on your toes,’ as we could experience a second economic downturn at the drop of a hat. These ‘what ifs’ can, yet again, throw a curveball for the industry, just as we saw when COVID hit. If we’ve learned anything in the past couple of years, it’s that planning for the unthinkable ‘what ifs’ must be top of mind.”

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Impex

India and Australia sign an Economic Cooperation and Trade Agreement

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India and Australia sign an Economic Cooperation and Trade Agreement. Image: Pexels
India and Australia sign an Economic Cooperation and Trade Agreement. Image: Pexels
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India-Australia to sign a historic Economic Cooperation and Trade Agreement (Ind-Aus ECTA), as per the agreement Australia would reduce duties on products with a 100 percent tariff.

The trade agreement is to boost several sectors of the economy, especially textiles, gems and jewellery and pharmaceuticals.

Before going into effect, the deal that the two nations inked in April of this year required to be ratified by the Australian parliament. Piyush Goyal, a union minister, called it a “landmark occasion” and expressed his gratitude to the prime ministers of Australia and India for making it happen. After its implementation, he claimed, the codes and the customs regime will be harmonised.

Anthony Albanese Prime Minster of Australia announced on twitter “Our Free Trade Agreement with India has passed through parliament”

 

Here are some implications of the FTA for Australia and India:

  1. The prospects and advantages of more open trade with India will soon be available to Australian exporters, firms, employees, and consumers once the FTA agreement is put into effect.
  2. The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) will become effective 30 days (or at a later date mutually agreed upon) after each party has confirmed in writing that all domestic conditions have been satisfied.
  3. Following ratification, India and Australia will decide when to put the agreement into effect. A day before to that day, customs authorities will also issue a notification.
  4. FTA will give Australian companies access to a new market where they can contact the 1.4 billion customers of the world’s fastest-growing major economy.
  5. When it is put into effect, the agreement will give India’s over 6,000 major industries—including textiles, leather, furniture, jewellery, and machinery—duty-free access to the Australian market.
  6. Additionally, Australia has provided zero-duty access to India since day one for almost 96.4% of exports (measured by value). This applies to a wide range of goods that are now subject to a 4%–5% customs charge in Australia.
  7. The pact would mostly help the textile and garment industries, a few agricultural and fishery items, leather, footwear, furniture, sporting goods, jewellery, machinery, electrical goods, and railroad carriages.

In a nutshell, the India-Australia ECTA will strengthen the two nations’ already solid, strategic relationships, dramatically increase their bilateral commerce in commodities and services, generate new job opportunities, boost living standards, and generally promote the welfare of their respective populations.

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