This increase has been termed as rate restoration increase (RRI).This is the third freight hike in a period of 11 months. The first one was on October 1, 1999, when too it was increased by $300 per TEU and $600 per FEU, followed by another increase on April 1, 2000, by $150 per TEU and $300 per FEU.EISA has strongly urged the commerce and surface transport ministries to intervene immediately so that the proposed increase is not implemented by the foreign lines which are least concerned about the growth of Indian exports.

It also urged the ministries to ask the national carrier, Shipping Corporation of India Ltd, not to associate itself with this move in national interest.EISA president DJ Bapooji said in a statement that the proposed unilateral increase by shipping lines would almost double the rates from a year ago and it would have serious implications on exports from the region.Not only it would severely undermine the competitiveness of exports, but also export of all the major commodities such as tea, jute, chemicals, engineering goods would be affected, especially where exporters had entered into contracts in advance, he said.

For low-value products, such as jute goods, the new freight would work out to on an average 20-30 per cent of the value of the goods. "This would have disastrous consequences for exports of jute goods, a commodity which is already facing a serious threat from itslow cost and locally available substitutes," he said.Engineering exports too, which are mostly low-valued, would suffer a major setback, he believes.

As for tea, exporters were already in mid-season and the proposed freight hike would completely upset the rhythm in the second half of the year, he said.Mr Bapooji said that at a recent interaction between the commerce ministry and the Tea Board towards evolving a joint plan of action to promote tea exports, it had been noted that Indian exporters were already suffering from severe freight disabilities vis-a-vis competing countries such as Kenya and Sri Lanka.According to him, the proposed move on the part of IPBC would further aggravate this disability factor and would be completely against the efforts currently being made to boost exports of tea from India.