Cabotage law to be relaxed

The government is open to allowing vessels of neighbouring countries to sail in India's coastal waters through a relaxation in the Cabotage law.

This is part of the new maritime policy for which the shipping ministry will shortly seek a Cabinet approval. At present, only Indian flag vessels are allowed to sail in coastal waters.

The proposed move is aimed at introducing competition in coastal shipping as well as improving trade with these countries. The shipping ministry, however, intends to insist on a reciprocal relaxation too.

Shipping Ministry officials said initially neighbouring countries like Pakistan, Myanmar, Dubai, Sri Lanka and Bangladesh could be looked at for this reciprocal relaxation.

Easing of the Cabotage law has been favoured by the coastal shipping industry, which has opposed any kind of relaxation on the grounds that this move will hurt its interests.

Ministry sources, however said that the reciprocal arrangement would benefit all. "As the trade would increase considerably, Indian vessels would be able to carry more traffic," they argued.

It will also make the coastal industry more efficient. Indian shipping companies also argue that internationally, domestic coastal industries are protected by Cabotage laws.

For instance, Cabotage laws exist for countries like the US, Brazil, Greece and Japan.

Earlier attempts by the directorate-general of Shipping at relaxing the Cabotage laws were met with stiff opposition from the domestic industry.

Under the present Cabotage laws, transportation of goods between two local ports by foreign ships is allowed only if suitable domestic ships are not available and special licences are issued to such ships. In such exceptional cases, Cabotage laws can be relaxed by the DG Shipping's permission.

The cabinet proposal for the National Maritime Development Policy (NMDP) is the final version of the draft policy already available on the net, after incorporating suggestions from various industry players. Ministry officials have said that first an approval for the Policy would be sought.

They added that after the approval was obtained, another proposal would be prepared which would contain specific project proposals and cost estimates.