More Indian ports want cabotage rules eased

After the government relaxed cabotage rules for containerised cargo for DP World’s Vallarpadam terminal in Cochin Port, the Shipping Ministry has started receiving demands for similar relaxation from ports that handle containers, such as JN Port and Visakhapatnam, reported The Hindu.

According to the existing cabotage policy, no foreign ship can engage in coastal trade in India (trade between ports in India) except under a licence from the director-general of shipping.

Earlier this year, the relaxation of cabotage laws for Vallarpadam container terminal in Kochi allows foreign vessels to operate feeder services for a period of three years. The relaxation will be reviewed after three years. The move, which is yet to be notified, is good for the Dubai-based DP World, which operates ICTT in Vallarpadam.

Such a move, which would allow foreign flagged vessels to pick and drop country’s domestic cargo between various ports along the Indian coastline without prior approval, is sure to irk Indian shipowners, who have already been fighting against this relaxation, even for DP World.

The CEO of Indian National Shipowners’ Association (INSA), Anil Devli, said that INSA had expressed similar fears to the ministry earlier when it relaxed cabotage for DP World terminal. “The government cannot favour one terminal operator,” said Devli. He refuted the perception that Indian shipowners do not deploy enough capacity for coastal cargo.

“A monthly capacity of 42,900 TEUs is being provided by Indian flag vessels calling on Vallarpadam Terminal, the August data shows. This entire capacity is available for transhipment boxes for Western Coast ports, which include the port of Cochin.

The total transhipment cargo carried provided by Vallarpadam Terminal to these Indian carriers is about 2,500 TEUs a month, which is a dismal six per cent of the capacity deployed,” said Devli.

He emphasised, “It would be important to note that on the East Coast of India, Indian ships are carrying transhipment volumes of about 5,000 TEUs a month.

This data shows that cabotage has nothing to do with transhipment. This needs to be considered before any decision is made in haste or on the basis of incorrect information.”