Relaxing cabotage laws criticised by Indian coastal shipowners group

THE relaxation of India's port cabotage rules of coastal trade by foreign-operated vessels at DP World's Kochi International Container Terminal (ICTT) known as Vallarpadam terminal, has been criticised by the Indian National Shipowers' Association (INSA) as favouritism for one terminal operator over another.

INSA chief executive officer Anil Devli said the relaxation of feeder services which runs for a period of three years is significant in comparison to the United States which exercises strict cabotage rules outside of 15 day period after Hurricane Sandy.

"Foreign flag vessels enjoy an easy taxation regime compared with Indian flag vessels," Mr Devli said, cited a report in The Hindu's Business Line of growing requests for cabotage to be suspended at India ports including JN Port and Visakhapatnam.

The assured cargo from cabotage means that higher freight rates are charged by Indian shipowners which negatively affects cargo volumes at the Dubai-based DP World-operated ICTT. DP World aims to hit its traffic volume of 775,000 TEU by suspension of cabotage rules.

Mr Devli said that the widely held view of capacity shortfall for coastal cargo is unjustified at a monthly capacity of 42,900 TEU provided by Indian flag vessels calling on ICTT, transhipment accounts for "about 2,500 TEU a month, which is a dismal six per cent of the capacity deployed."