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Top India shipping line reviving Iran venture to fight slump
[NEW DELHI] State-run Shipping Corp of India Ltd, struggling for respite from an industry downturn, plans to revive a 40-year-old joint venture with an Iranian company.
The recent easing of sanctions on Iran opened the way to resuscitating Irano Hind Shipping Co, which potentially offers access to Central Asian markets such as Kazakhstan, according to the Indian company's Chairman B B Sinha.
"We don't want this company to just die out," Mr Sinha said in an interview on Wednesday, referring to the joint venture.
"The other partner, Islamic Republic of Iran Shipping Lines, has got great presence in the Caspian Sea."
Shipping Corp climbed as much as 13.1 per cent on Friday in Mumbai, the most in more than a year. That pared its decline in 2016 amid a downturn that could saddle the global shipping industry with about US$5 billion of losses this year.
South Korea's Hanjin Shipping Co this week became a high-profile casualty of the sector's slump, roiling global supply chains after filing for court protection.
"The global shipping industry is still struggling to come out of its unprecedented long recession," Shipping Corp said in its annual report.
India's largest carrier and Islamic Republic of Iran Shipping Lines had in 2012 decided to dissolve the Tehran-based joint venture, after years of sanctions against Iran over its disputed nuclear program crimped trade flows. Those restrictions began easing in January.
Prime Minister Narendra Modi is striving to scale up India's ties with Iran as the latter opens up to the world again. India is considering up to US$20 billion of investment in the Persian Gulf nation's ports sector and energy industry.
The Indian company is mulling whether to operate three bulk carriers and an oil tanker owned by the joint venture.
It holds 49 per cent of Irano Hind Shipping, while Islamic Republic of Iran Shipping Lines controls the rest.
Oil exports have surged from Iran after sanctions were eased. Shipping Corp resumed crude shipments from the country in July after a gap of four years.