trade notes
KILLING WITH KINDNESS Easing India’s Cabotage Rules Could Crush Domestic Carriers
BY V.L. SRINIVASAN
I
n September 2015, the Indian government announced a temporary relaxation of its cabotage policy. But a year into the five-year hiatus, over-dimensional cargo and project cargo movers in the country have expressed dissatisfaction and dubbed the decision as a non-starter that only benefits foreignflagged vessels. India’s cabotage policy aimed to encourage national coastal shipping by reserving domestic cargo for nationally-flagged ships through its interpretation of Section 406/407 of the Merchant Shipping Act of 1956. The act requires a foreign-flag carrier to seek permission from the Directorate General of Shipping, or DGS, for transportation of goods between domestic ports. When the relaxation policy came into effect six months later in March 2016, a notification from India’s Shipping Ministry said that the decision to
A pair of DHDT reactors is discharged from the geared vessel that carried them from India’s west coast to Kolkata. Critics argue that the recent relaxation of India’s cabotage law will make domestic carriers uncompetitive. Credit: ABC India 52 BREAKBULK MAGAZINE www.breakbulk.com
ISSUE 5 / 2016