In a effort to enhance and promote the Indian shipping industry and ensure guaranteed business to local shipowners, the country's government has scrapped a key restrictive tender policy requirement.

As per rules set by the Director-General of Shipping (DGS), an Indian ship has the so-called right of first refusal to match the lowest rate quoted by a foreign-flag ship in every public tender, and take the contract.

This is subject to the condition that the difference in the bid price between the Indian flag vessel exercising the right of first refusal and lowest rate quoted by the foreign-flag vessel shall be limited to 10%. This requirement has now been scrapped for tenders to finalise a contract of affreightment (CoA) and channel deepening work at ports.

"The amendment was carried out keeping in mind the government's policy of strengthening and promoting Indian shipping in a competitive framework," said Ash Mohammed, assistant DGS.

"In the earlier requirement, Indian fleet owners were at risk losing business if their price quotation did not come in the 10% range of the lowest foreign bid. Now they can quote any price, and still be considered for the right of first refusal."