India softens cabotage measures for container ports

In an effort to support the country’s trade and economic growth, the government of India has relaxed cabotage restrictions for ports that transport at least 50% of the container volume they handle.

With the lifting of some cabotage restrictions, shipping lines will now be able to consolidate Indian EXIM and empty containers at transshipment ports in India for onward transportation to destination ports by main shipping lines.

Furthermore, foreign vessels will transport EXIM and empty containers from any port in India to a transshipment port and vice versa, in addition to Indian vessels.

“The spare capacity of the foreign flag ships which could not be utilised earlier due to cabotage restrictions will now be gainfully utilised enabling them to offer competitive container slot rates to exporters and importers leading to competition led efficiency in container transportation and lower logistic costs for the shippers,” the government said in a statement.

The government added that the container port seeking cabotage relaxation for transshipment port would have to achieve transshipment of 50% or more of the EXIM and empty cargo handled in one year, while new transshipment ports will have a period of one year to achieve the transshipment traffic of 50% of the traffic handled in the second year in order to continue with cabotage relaxation.

India said that the relaxation would be annulled for ports which fail to transship the minimum required volume per year. These ports would not be considered for cabotage relaxation for next three years.