India: Coasts might open up for foreign ships

The Union government is planning to relax cabotage norms at major ports for empty containers, to let foreign-flagged vessels carrying empty containers move on India’s coastline without restriction. The shipping ministry has sought the Directorate General of Shipping’s view in this regard.

Cabotage rules dictate transport of goods or passengers on a ship or aircraft registered in another country. If the restrictions are done away with, movement of transhipment cargo along the coastline would get a boost. “There are currently only 15 vessels involved in coastal trade. Shortage of containers limits the capacity of Indian-flagged vessels in transport of cargo. It will also boost coastal shipping by filling the supply gap in the container segment,” said a senior government official.

The Prime Minister’s Office has asked the road transport and shipping ministries to suggest ways to increase transhipment cargo movement in the country and reduce instances of containers offloading in the port of Colombo in Sri Lanka.

According to Section 407 of the Merchant Shipping Act, 1958, only Indian vessels or ships chartered by Indians can engage in coastal trade; though the directorate general can issue licences to foreign ones for a period.

The shipping ministry had relaxed these norms for the Dubai Port World-operated International transhipment container terminal at Vallarpadam, Kochi, in Kerala in December 2012. The goal was to boost the export-import trade in India and reduce transit time. Subsequently, other major ports have requested the Centre to also allow ships carrying empty containers.

A senior executive at a shipping company said, “There is still some clarity required on whether the empty containers have to be treated as cargo, as it is a source of revenue for the ship. Accordingly, the rules will have to notified.”
Source: Business Standard