India close to easing cabotage law
India is set to ease a key law by permitting foreign registered container ships to carry cargo between the country's ports, as long as it is shipped out or in through the international container transhipment terminal or ICTT at Vallarpadam in Cochin port, reported The Mint.
India's coastal trade (shipping cargo between different local ports) is reserved for ships registered in India and foreign ships can be hired only when Indian ships are not available, according to the so-called cabotage law.
A foreign shipping line currently cannot carry a container either to or from the Vallarpadam ICTT to any other port in the country, hampering its operations following the February 2011 start.
A panel of secretaries headed by cabinet secretary Ajit Kumar Seth discussed the proposal on Wednesday. The likely policy change comes with a rider. The relaxation will be only for export/import containers or transhipment containers going through Vallarpadam. And it will be for a limited period of three years till the country's coastal shipping sector becomes competitive with the introduction of tax breaks, enabling local fleet owners to expand capacity to meet demand.
The proposals need to be signed off by the Union cabinet.
DP World, the world's fourth biggest container port operator majority owned by the Dubai government, won the 30-year contract to build and operate the ICTT in a public auction in 2004.