India Waives Cabotage to Ease Port Congestion

India Waives Cabotage to Ease Port Congestion

The Indian Shipping Ministry agreed to temporarily relax cabotage regulations to allow foreign shipping lines to transport containers between the ports of Jawaharlal Nehru (Nhava Sheva), Mumbai, Mundra and Pipavav.

The move met strong opposition from domestic operators, particularly the Shipping Corporation of India. The government plans to facilitate diversion of traffic after the recent shutdown at Nehru and Mumbai forced major carriers to skip calls and reroute vessels to Mundra and Pipavav.

“The request for relaxation for the limited purpose of restoration of cargo to its original destination, which were diverted to Mundra/Pipavav or vice versa, using only the scheduled liner services of foreign-flagged vessels is reasonable,” the Directorate General of Shipping said after a meeting with all stakeholders.

By The Numbers: U.S. Container Trade With India.

The directorate, the country's maritime monitoring agency, said the ad-hoc permission will apply to export-import cargo diverted until Aug. 31.

At the meeting, representatives of the Indian National Ship-owners’ Association said state-owned SCI and other domestic carriers were in a position to offer adequate coastal services between Mumbai and Gujarat.

Indian Customs earlier approved a similar interim arrangement for the diversion of “custom-cleared” export containers by rail from Nhava Sheva to Mundra and Pipavav for onward connections on vessels that skipped the Nehru call.

Under existing local cabotage laws, foreign-flagged vessels are not permitted to haul intra-India cargo as the government protects national carriers and promotes coastal shipping.

Bowing to persistent demands from trade associations, the government is reportedly considering waiver of such restrictions specifically for Cochin’s International Container Transshipment Terminal, scheduled to open in October, in a bid to compete with other transshipment hubs in the region.