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Explained: What is the unique maritime cluster coming up at Gujarat’s GIFT City?

While launching the Ghogha-Hazira ferry earlier this week, Prime Minister Narendra Modi spoke about the upcoming maritime cluster at GIFT City in Gujarat.

Written by Avinash Nair , Edited by Explained Desk | Ahmedabad | Updated: November 18, 2020 12:18:48 pm
The Gujarat Maritime Board (GMB), a nodal agency of the Gujarat government, has been trying to develop such a cluster at GIFT City in the state capital Gandhinagar. (Source: maritimecluster.org)

What is the Maritime Cluster project?

The concept of maritime cluster is new to India, but these clusters have been driving some of the most competitive ports of the world like Rotterdam, Singapore, Hong Kong, Oslo, Shanghai, and London.

Simply put, a maritime cluster is an agglomeration of firms, institutions, and businesses in the maritime sector that are geographically located close to each other.

The Gujarat Maritime Board (GMB), a nodal agency of the Gujarat government, has been trying to develop such a cluster at GIFT City in the state capital Gandhinagar through its subsidiary Gujarat Ports Infrastructure and Development Company Ltd (GPIDCL).

This cluster will initially consist of Gujarat-based shipping lines, freight forwarders, shipping agents, bunker suppliers, stevedores, and ship brokers with chartering requirements.

In the second stage, the cluster would attempt to bring Indian ship owners, ship operators, Indian charterers and technical consultants scattered in cities like Mumbai, Chennai, and Delhi to Gujarat. Thereafter it would target to attract global players in the maritime sphere.

What is the need for a maritime cluster?

This project will try to bring back businesses that have migrated over the years to foreign locations due to the absence of the right ecosystem in the country.

“Landlocked countries like Switzerland and Luxembourg have developed a number of maritime services that are not currently available in India. Gujarat has a lot of ports and handles 40 per cent of the country’s cargo, but we have not targeted the entire value-chain,” a GMB official associated with the project said.

“Secondly”, the official said, “because we didn’t have the ecosystem, a lot of Indian companies have moved to foreign locations. For instance, Adani Group has the biggest port in Gujarat, but for their chartering needs, they are based out of Dubai. Similarly, JM Baxi have their port facilities in Gujarat, but they operate out of Mumbai for their chartering needs”.

Large corporates like the Aditya Birla Group and Tata Group tap clusters in Dubai and Singapore for their maritime needs. 📣 Express Explained is now on Telegram

Apart from attracting maritime businesses, what else will the maritime cluster do?

An Alternate Dispute Resolution (ADR) Centre will be set up under the aegis of the Gujarat Maritime University, which will come up at the maritime cluster. A centre such as this does not currently exist in India.

“This sector is international in character and hence is a breeding ground for arbitration and mediation in cases revolving around bunker disputes, ship sales, shipbuilding and repairs, commodities, etc.,” the GMB official said, adding that the Singapore Maritime Arbitration Centre could be roped in for this purpose.

This centre will function like the Emirates Maritime Arbitration Centre (EMAC) at the Dubai Maritime Cluster, China Maritime Arbitration Commission in the Greater Bay Area in China, and the Singapore Centre for Maritime Arbitration in the Singapore Maritime Cluster, among others.

This centre in Gujarat will provide an option to Indian players seeking to avoid availing the services of international alternate dispute resolution hubs which entail huge costs, time, and travel.

The cluster is also expected to house the office of the Director General of Shipping. “We have convinced DG Shipping to move their regional office in Kandla to Gandhinagar. They are looking at GIFT City,” the official said.

This office, which is expected to come up on 12,000 square feet of space in GIFT City, will look after the needs of the shipping sector, including ship recycling.

How old is this project and what is the current status?

While the project was conceptualised back in 2007, it received in-principle approval from the state government only in 2015. A high-level committee was also formed to pilot this project.

“It is only last month that we got approval from the government to be based out of GIFT City for maritime cluster operations. About 15 players including AP Moller Maersk have shown an interest in being part of this cluster,” the GMB official said.

The maritime cluster is expected to be take up 8,000 square feet of space in GIFT City later this year. Currently, GPIDCL functions from the sixth floor of Sagar Bhavan, which is the headquarters of GMB at Gandhinagar.

“We expect to move into GIFT City by the end of December this year. This office will also have the Alternate Dispute Resolution Centre,” said the official. The maritime cluster is largely expected to in the SEZ area of GIFT City where charterers, ship brokers, and maritime lawyers dealing in foreign currency will be based.

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