An inter-ministerial panel has asked the Shipping Ministry for short-term cabotage relaxation on account of lower cost of coastal transportation to help the economy.
Cabotage refers to transport of goods between two points in the same country.
"Inter-Ministerial Committee (IMC) directed that case for short-term cabotage relaxation may be considered by the Ministry of Shipping keeping in view of expected benefits to the economy... And for achieving modal shift of cargo towards coastal shipping," said the minutes of the fourth meeting of IMC on augmenting coastal shipping.
The issue of cabotage relaxation was discussed in detail during the meeting, which was held last month.
The panel is of the opinion that cabotage restrictions, if relaxed, will introduce competition in coastal movement of cargo.
The committee noted that due to higher cost of operations of Indian flag vessels on account of various taxes, the Indian shipping companies will be adversely impacted by cabotage relaxation. However, the economy will benefit as cost of transportation of foreign flag vessels is lower.
The inter-ministerial panel has members from ministries like coal and shipping.
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