New Delhi: India may consider relaxing cabotage rules to allow more foreign-flagged vessels to transport domestic cargo, as authorities brace for a potential shortage of ships and containers amid rising freight costs due to the simmering conflict in West Asia, said people familiar with the discussions.
A suggestion in this regard was put forth at a meeting called by the Directorate General (DG) of Shipping and attended by senior government officials on Friday.
“There may be a shortage of containers and vessels in the coming two weeks if the West Asia crisis persists,” said a person present at the meeting, referring to a suggestion by a government arm. “Easing cabotage rules was discussed as a possible temporary solution to mitigate the crisis,” the person said.
Earlier this year, DG Shipping scrapped partial easing of cabotage rules allowing foreign ships to move export-import (Exim) cargo between Indian ports without the need for any specific licence. The relaxation was introduced in 2018.
The Centre also introduced standard operating protocols (SOP) for dealing with stranded cargo at government-owned ports. The relaxations include permitting storage of cargo destined for West Asia as transhipment cargo during the affected period.
Ports may also consider user requests for reduction, waiver, or remission of charges on a case-to-case basis, according to the SOP.
There are currently around 38,000 West Asia-bound containers stranded across the country. Of these, 3,000 containers contain the premium basmati rice, while 1,000 containers are loaded with bananas and grapes that are prone to perish if not promptly disposed of.”We are in talks with global shipping lines to take perishable cargo to Dubai, Saudi Arabia, or Oman,” said a government official present at the meeting. Exporters also sought easier ‘back-to-home’ permits for selling their stranded cargo in the domestic market.
While exporters raised concerns about higher freight costs, domestic shipping liners defended the move citing a spike in insurance premium and higher fuel costs. They also requested the Indian Navy to provide cover for escorting stranded vessels in the region.
According to the Ministry of Ports, Shipping, and Waterways, Indian-flagged ships continue to remain safe in West Asia. “No confirmed detention, boarding or casualty involving Indian-flagged vessels has been reported,” an official statement said, adding all 35 Indian-flagged vessels in the Persian Gulf and three in the Gulf of Aden are being continuously tracked at hourly intervals.
