Changes to RoFR Policy in Public Tenders for Cargo Transport in India

The Indian government has made changes to the priority order of the right of first refusal (RoFR) policy in public tenders for cargo transport. This was necessary due to the emergence of a new category of fleet owners operating in Gujarat International Finance Tec-City (GIFT City), India’s first International Financial Services Center. The new priority order now gives first preference to Indian-built, Indian-flagged, and Indian-owned ships, followed by foreign-built, Indian-flagged, and Indian-owned ships. The third priority is given to Indian-built, foreign-flagged, and foreign-owned ships. These changes aim to accommodate the interests of the new category of ship owners and increase national tonnage.

Under the RoFR rules, local shipping companies have the right to match the lowest price offered by a foreign-flagged ship in tenders held by state-owned companies. If Indian shipping lines refuse, only the foreign-flagged ship with the lowest tariff will be allowed to carry the cargo. The RoFR policy will only come into play if the price quoted by Indian participants is within 20% of the lowest bid offered by a foreign ship owner.

The changes in RoFR sequencing were announced by the General Directorate of Shipping in October 2021. The intention is to prioritize Indian-built ships and boost the Make in India initiative, promoting locally built ships and increasing demand for them. These changes reflect the government’s efforts to support domestic fleet owners and stimulate the Indian shipping industry.

Source .