Govt Not To Extend Relaxation To Cabotage Laws
Contrary to industry expectations, the government has decided not to extend the relaxation to the cabotage laws which expired in March last. The government had partially relaxed the cabotage laws in 1992.
The surface transport ministry, the nodal ministry for the shipping ministry, is of the belief that the relaxation to the cabotage laws has failed to serve its purpose and hence decided against further extension.
Under the cabotage laws, trading on the coastal route for carrying the inland as well as the import and export cargo is the prerogative of the home vessels. This is the practice in the major maritime countries like the US and Japan although some countries do allow the foreign vessels to do business on their coastal routes.
On pressure from the foreign shipping industry that unless they were allowed to visit the minor ports, it is difficult for them to pick up the export cargo for export. Similarly, there were difficulties in offloading the import cargo which required offloading at the minor ports.
The problem for the major foreign shipping lines was that there ships were too large to anchor at the small ports even though they required to pick up large volumes of the export cargo from these small ports. So, unless such large foreign shipping lines were allowed to hire small feeder foreign ships, they would not be able to collect the export cargo from the small ports.
The same kind of difficulty they said they were encountering in the case of the import cargo which required to be offloaded at the small ports.
The government, by a partial relaxation of the cabotage laws in 1992, allowed the foreign ships to " aggregate and segregate" the import and export cargo within the Indian ports by allowing the foreign shipping companies to operate their feeder services between the port of call and the minor ports. Accordingly, the feeder services were permitted to deploy container and lash (light aboard) ships for the purpose.
This was essentially an encroachment on the shipping rights of the Indian vessels. But the concession was given in the hope that in the due course the small ports would be so much developed that this kind of aggregation and segregation would not be required.
Though the relaxation was first given for two years in 1992, further relaxation were given to it at least twice as aq result of which the temporary measure remained in force until the end do 1996-97.
The government is of the view that the expected development of the ports had not taken place and so the temporary relaxation cannot be allowed to continue ad infinitum.
So, the job of distribution of the import cargo from the port of call to its destination to the subsidiary ports will no longer be allowed to be done by a foreign vessel. Similarly, the job of collection of the export cargo from the subsidiary ports to the designated major ports from where the cargo is shipped by the foreign vessels to its overseas destinations, would no longer be done by foreign vessels. This job will now be done exclusively by the Indian vessels.