The Indian government Thursday approved relaxing its cabotage law to allow foreign-owned and -operated ships to move containerized cargo to and from the Vallarpadam International Container Transshipment Terminal in the Port of Cochin.
Officials said the easing of the regulation, which came amid protest from domestic ocean carriers, would be subject to review after three years.
“The primary objective of relaxation in the cabotage policy for VICTT is to attract cargoes destined for Indian ports, which are presently being transshipped at Colombo (Sri Lanka) and other foreign ports. This initiative is expected to promote transshipment of Indian cargo from VICTT and reduce dependence on nearby foreign ports,” the official release said.
Officials said cabotage restrictions had been a major deterrent to many mainline carriers wishing to offer regular calls at the Vallarpadam terminal, a DP World facility.
“The Indian container trade has seen a steady growth over the years. Despite this, more than half of Indian containers are being transshipped at ports outside India, mainly at Colombo, Singapore, Salalah and Jebel Ali,” officials said.
VICTT, which began commercial operations in February last year, has been struggling to turn around its throughput volumes. Traffic from April through July declined to 45,000 20-foot-equivalent units from 56,000 TEUs a year earlier.
The $600 million terminal is the first stage in DP World’s three-phase development at Vallarpadam, offering an annual capacity of 1 million TEUs in the initial phase and 4 million TEUs when fully built out.