The Centre’ move to relax cabotage law may be a ‘game changer and transform India’s ports into a major transhipment hub,’ according to Mumbai and Nhava Sheva Ship Agents Association (MANSA).
On May 21, the Shipping Ministry issued a notification lifting restrictions on foreign registered vessels on transportation of loaded or empty containers between Indian ports. Earlier, it was the prerogative of Indian registered shipping lines that paid taxes and were governed by Indian laws.
Commenting on the development, Captain Vivek Singh Anand, president, MANSA, said, “Apart from creating a level-playing field, reduction in freight rates and making Indian trade more competitive, the move would allow coastal movement of export, import/ empty containers by foreign vessels leading to healthy competition among shipping lines,”
He said Indian ports can now attract cargo originating from or destined to foreign ports, leading to cargo growth in India. “This move would also have a positive impact on the competitiveness of the Indian traders and manufacturers by reducing the supply chain lag time and transhipment cost at a foreign port,” he said.
According to MANSA the relaxation in cabotage law would also address the problem of empty containers getting accumulated at some Indian port while other ports facing a shortage of empty containers.
“As a result, the additional cost of repositioning of these empty containers to deficit port(s) across the Indian coast would be reduced substantially with foreign vessels now being allowed to pick up such containers. The issue of empty containers was an outcome of uneven growth in containerised cargo resulting from the imbalance in exports and import,” MANSA chief said.