It looks like the truck industry is in for a rude awakening in India. A proposed hike in third party motor insurance alongside a near certain rise in diesel prices are soon expected to hit the Indian freight industry. No doubt this is a double dose of bad news.
Here’s how the situation lays out. With the idling fleet capacity present across several key trucking sectors in the country along with the steep decline in rentals due to a lack of freight availability, it’s going to be very hard for truckers to absorb any rise in costs in insurance premiums.
The trucking industry in the country is already enduring a difficult spell. This is due to the slowdown in freight pickups. Now insurance regulators plan to hike TPM insurance anywhere from 10 percent to 20 percent. This will really put truckers in a bind. Consequently, the government should step in and mandate the TPM insurance be detariffed. This will guarantee free and fair play of market factors. The Indian Foundation of Transport Research offered this suggestion.
IFTRT has been sounding this bell all along. They’ve been urging the union government to detariff the TPM premium revision so as to remove it from the regulatory clutch. They maintain that insurance companies are hiking insurance on a yearly basis based on tampered data.
The Foundation has requested the government, that since there are almost 25 private insurance companies, the third party premium must be detariffed with an almost instant impact like on the damage motor insurance premium. Here, a 70 to 80 percent discount is being offered.
Part of the current woes for the Indian trucking industry relate to the fact the economy has lagged recently. This certainly has impacted the trucking industry and coupled with these hikes, things could be tough for a few months.