New Delhi exempts vessel sharing pacts from ambit of competition watchdog

New Delhi exempts vessel sharing pacts from ambit of competition watchdog

New Delhi: The Indian shipping industry has been spared an irritating bureaucratic procedure, with the Indian government exempting vessel sharing agreements (VSAs) among shipping companies from the ambit of the unfair trade practices watchdog Competition Commission of India (CCI) for one more year.

VSAs allow entities to share space in each other’s vessels, and form a common practice in the shipping industry. The authorities, after finding that such agreements are unlikely to hurt competition, declared that shipping companies would not be required to seek the watchdog’s nod before implementing such pacts.

The exemption is subject to certain conditions, e.g. these agreements should not include practices involving fixing prices, limitation of capacity or sales and the allocation of markets or customers. These aspects, with respect to VSAs, are to be monitored by the Shipping ministry.

A one-year exemption, which had earlier been provided by the government, expired in December 2014. That exemption was applicable for carriers of all nationalities operating ships from any Indian port.

Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.

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1 Comment

  1. MM Sharma
    April 20, 2015 at 3:11 pm

    Who is this journalist to call a competition clearance as an “irritating bureaucratic procedure”? What he knows about competition law/antitrust? Does he know that all over the World antitrust immunities granted earlier to the age old liner conferences such as IPBA have long been withdrawn and it is only in India this stupid practice still goes on under the pressure from the shipping lobby. Let him contact me if he wants to have more details. VSA as such is harmless and efficiency enhancing but can someone rule out possible cartelization i.e price fixing taking place . Does the authoor know about the harm caused by cartels to the economy ? Let him read my articles on cartelization in public procurement. I strongly obje4ct to the use of such irresponsible terms for a fir trade regulator,which is respected all over the World for teaching meaning of fair competition to the likes of DLF and Hirandani and BCCI !.