Indian Government eases cabotage policy for special foreign vessels


The Indian Shipping Ministry has revealed plans to ease cabotage law for a period of five years, in a bid to develop coastal shipping and decongesting the roads and railways across the country.

The relaxation will allow exclusive foreign ship operators to bring in ships such as the roll-on and roll-off vessels, LNG vessels and over-dimensional cargo or project cargo carriers, to transport cargo between different ports along its coast.

The previous cabotage policy in the country allowed first preference to be given to Indian flagships over cargo and foreign ships.

"Such special vessels are in short supply in the country but since they cater to a specific class of cargo, their availability will make it possible to shift cargo movement from road and rail to coastal shipping."

The foreign ships were allowed for operations only during the non-availability of Indian ships.

A statement published by the ministry read as: "With this relaxation, vessel operators will be allowed to bring foreign flagged vessels of this category to ply on the coastal routes.

"Such special vessels are in short supply in the country but since they cater to a specific class of cargo, their availability will make it possible to shift cargo movement for these commodities from road and rail to coastal shipping."

The relaxation in the cabotage laws is expected to bring in more trade to major ports in India, while also enable a green mode of transport reducing fuel intensity and lower carbon emissions.

According to The Economic Times, about 60% of nation's exports and imports containers are transshipped through ports outside the country that include Singapore, Salalah and Colombo.