Government Taps SCI to Run Special Vessels to West Asia

The commerce department is working with the Shipping Corporation of India (SCI) and other agencies to launch special cargo services to West Asia in a bid to offer Indian exporters significantly lower freight rates amid ongoing disruptions around the Strait of Hormuz. Current freight to West Asia is estimated at about 3,000–3,500 dollars per 20‑foot container and 4,500–6,000 dollars for refrigerated units, but the government is exploring tariffs that could be nearly half these levels to restore viability for shipments, especially in agri and perishable segments.

With the Strait of Hormuz still inaccessible, vessels under the proposed arrangement may call alternative regional ports, from where cargo can be moved overland, a routing pattern already in use for some markets in the Gulf region. Exporters, particularly those moving fruits and vegetables, have warned that freight in several lanes has risen above the value of the goods themselves, making trade unworkable without intervention.

Based on aggregated demand for both reefer and dry cargo, SCI is expected to finalise deployment plans, including service routes, frequency and vessel size. Options under discussion range from deploying a 4,000‑TEU merchant vessel to chartering smaller ships of around 1,000 TEU in the initial phase, allowing capacity to be scaled with demand.

Container Corporation of India (Concor) will support the initiative by ensuring container availability and facilitating inland movement of export cargo to gateway ports, amid concerns over a potential box shortage in the coming weeks. The government had earlier evaluated the option of direct freight subsidies but sees the special‑vessel model as a more targeted, WTO‑compliant solution that can lower logistics costs for specific West Asian markets without breaching global trade rules on subsidies.