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Essar Ports to ask clients to pay in dollars

Essar Ports to ask clients to pay in dollars

Essar Ports will gradually ask its port users to pay tariff in US dollar instead of rupee. This means, the company would receive tariff in dollars from customers and convert the same into rupees at the prevailing exchange rate.

After Gujarat Pipavav shipyards, Essar Ports would be the second port operator to start moving away from rupees while charging tariff, reports indicate.

Essar Ports is the country’s second-largest private sector port and terminal operator and it operates terminals at Vadinar, Hazira, Salaya and Paradip among others. It mostly handles coal and bulk cargo imports apart from container traffic.

Rajiv Agarwal, Chief Executive of Essar Ports said some of the company’s clients have income in dollars. They have a dollar balance sheet as the pricing is dollar denominated, for example, steel. Therefore, the company has begun the process of migrating to a dollar tariff structure.

India’s container cargo sector has been going through a spell of privatization of late, with international firms including Maersk and DP World setting up shop in India.

This traffic has grown at an average rate of 13.27 percent per year at India’s major ports. Globally, container traffic has grown at around 10 percent over the previous 20 years.

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