Government today said it has relaxed the cabotage law for five years to allow certain special foreign vessels like Ro-Ro, to facilitate transportation of cargo between different ports along the country's coastline.
The development comes in the wake of long standing demand of the shipping industry for relaxation of the cabotage law. Cabotage is transport of goods between two points in the same country.
"The central government has decided to relax cabotage for special vessels such as Roll-On Roll-Off (Ro-Ro), Hybrid Ro-Ro, Ro-Ro cum Passenger, Pure Car Carriers, Pure Car and Truck Carriers, LNG vessels and Over-Dimensional cargo or Project Cargo Carriers for a period of five years," Shipping Ministry said in a statement.
With this relaxation, vessel operators will be allowed to bring foreign flagged vessels of this category to ply on the coastal routes, it said.
"Such special vessels are in short supply in the country but since they cater to specific class of cargo, their availability will make it possible to shift cargo movement for these commodities from road and rail to coastal shipping," it added.
The government said availability of Ro-Ro vessels is essential for the success of efforts to develop coastal shipping and decongesting roads and railways.
"As an example, large automobile clusters exist at Manesar and around Chennai. Large numbers of cars are transported from north to south and vice-versa. It is possible to shift major part of this transportation to coastal shipping," it said.
Not only would availability of Ro-Ro vessels decongest roads/railways, it would also enable a green mode of transport reducing fuel intensity and also reduce carbon emissions, the statement said.
So far, the cabotage policy in India allows first preference to Indian flagships over cargo and foreign ships. Cargo and foreign ships are allowed only when no suitable Indian flag vessel is available for the same.
Indian importers and exporters use Colombo, Salalah, Singapore and Dubai hubs for shipments adding to their costs.
Industry experts say relaxation in the cabotage policy is expected to bring more trade to major ports in India.
At present about 60 per cent of India's exports and imports containers are transshipped through ports like Singapore and Colombo. This transshipment through ports outside the country involves not only huge expenditure but also extra 7-10 days of transit time.
Transshipment is the shipment of goods or containers to an intermediate destination, and then from there to yet another destination.
India at present has 12 major ports which fall under Centre's jurisdiction and about 200 non-major ports under the control of states.
