India mulls easing cabotage, but domestic industry opposes move

INDIA's shipping ministry is considering liberalisation of domestic coastal shipping laws to permit foreign carriers to enter, though it faces opposition from the domestic industry.

If the Indian cabotage trade is restricted to domestic carriers, the ministry reasons, it is likely that non-Indian lines would avoid using the new one million-TEU DP World terminal that opens in September in Cochin and continue to employ feeder lines of their choice from Colombo.

While the ministry is canvassing the domestic industry for its views, the pressure is on to move much more cargo by short sea to relieve road congestion as only a few ports can receive large containerships because the shallows run out far from the coast.

But V Grammarian, managing director of Tran world Group, a cabotage provider, told London's Containerisation International: "Cabotage laws are everywhere, including the USA. Indian laws allow only Indian ships and companies to do the coastal services and the present supply is five times more compared with the demand, for coastal services."

Said Mr Grammarian: "What is the necessity to amend the law now? I feel there is some vested interest in this. The present law provides a provision to get foreign ships and companies to provide coastal services if the domestic tonnage is insufficient. This is good enough and the law does not need amendment. If need be, Indian companies are capable of deploying more ships on coastal routes."

As it stands some 75 per cent of India-bound containers are transhipped from Colombo or transshipment hubs in Singapore, Port Klang, Jewel Ali or Salaam, reported American Shipper. The shipping ministry estimates that India's importers and exporters face more than US$200 million in added costs due to transshipment.
(Source:www.schednet.com)