Shipping policies relaxed to boost logistics

India’s 7,517km long coastline is nature’s gift for major shipping activity. Several deep harbours comprising 12 major and 185 minor or intermediate ports, manage the coastal transportation of various cargo through low-cost conventional transportation. The government and shipping industry have recognized that shipping logistics as an aid to conventional coastal transportation would assist in the growth of cargo movement reaching directly into India’s enormous hinterland through the peninsula.

The primary objective of India’s shipping policy is to reduce the dependence of external seaborne trade on foreign shipping services. To ensure these objectives are fulfilled, the cabotage regulations in India through the Merchant Shipping Act, 1958, have reserved coastal trade exclusively for national flag vessels, restricting the operation of foreign vessels in Indian waters.

The carriage of coastal cargo by foreign flagged vessels is not entirely prohibited, but requires permission from the Director General of Shipping (DG). A foreign flagged vessel can enter an Indian port, unload and load cargo, but must return without loading or unloading cargo at other Indian ports.

Shardul Thacker is a partner with Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.