India is planning to relax its cabotage law to allow foreign-owned and operated ships to carry cargo between the country’s ports.
The Indian shipping ministry has proposed to change a law to allow foreign shipping companies to carry container cargo to and from the Vallarpadam international container transshipment terminal in the Port of Cochin, according to an article in The Wall Street Journal, which quoted two government officials close to the development.
India’s cabotage law is similar to those in many countries, including the U.S., where the Jones Act requires that port-to-port shipments be carried in U.S.-flag vessels built in U.S. shipyards, owned by U.S. companies and manned by U.S. crews.
The Vallarpadam terminal, which is operated by DP World, is designed to compete for transshipment cargo with neighboring hub ports such as Colombo in Sri Lanka; Singapore; Salalah and Jebel Ali in Dubai; and Tanjung Pelepas and Port Klang in Malaysia.
By relaxing the requirement that port-to-port cargo shipments within India be carried by Indian-owned and -operated ships, the government hopes to attract more containerized cargo by reducing time and cost for large foreign-owned container lines that now transship containers bound for or coming from India at neighboring transshipment hubs.