India may consider relaxing cabotage rules to allow more foreign-flagged vessels to move domestic cargo, as authorities brace for a potential shortage of ships and containers amid rising freight costs, according to people familiar with the discussions. A suggestion in this regard was put forth at a meeting called by the Directorate General (DG) of Shipping attended by senior government officials.
“There may be a shortage of containers and vessels in the coming two weeks if the West Asia crisis persists,” a person present at Friday’s meeting told ET, referring to a suggestion by a government arm.
“Easing cabotage rules was discussed as a possible temporary solution to mitigate the crisis,” the person cited above said.
Earlier this year, DG Shipping scrapped partial easing of cabotage rules that allowed foreign ships to move EXIM (Export-Import) containers between Indian ports without a specific license. The relaxation was introduced in 2018.
The centre is also likely to put in place standard operating protocols for dealing with stranded cargo at government owned ports. India currently has around 38,000 stranded containers across the country of West Asia bound shipments which are unable to travel due to escalating tensions in the Gulf region.
Of these, 3000 containers have Basmati rice while 1000 containers are loaded with bananas and grapes which are prone to perish if not promptly disposed.
“We are in talks with global shipping lines to take perishable cargo to Dubai, Saudi Arabia, or Oman,” a government official present at the meeting said. 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 rise citing spike in insurance premium and fuel costs. The shipping industry also requested for an Indian Navy cover to escort their stranded vessels from the conflict area.
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 region and three vessels in the Gulf of Aden are being continuously tracked at hourly intervals.
The Ministry also reviewed the status of vessels and cargo bound for Gulf Cooperation Council (GCC) and West Asian destinations. “Ports have been directed to extend all necessary assistance to minimise hardships faced by exporters and ensure continuity of EXIM trade,” the statement said.
“There may be a shortage of containers and vessels in the coming two weeks if the West Asia crisis persists,” a person present at Friday’s meeting told ET, referring to a suggestion by a government arm.
“Easing cabotage rules was discussed as a possible temporary solution to mitigate the crisis,” the person cited above said.
Earlier this year, DG Shipping scrapped partial easing of cabotage rules that allowed foreign ships to move EXIM (Export-Import) containers between Indian ports without a specific license. The relaxation was introduced in 2018.
The centre is also likely to put in place standard operating protocols for dealing with stranded cargo at government owned ports. India currently has around 38,000 stranded containers across the country of West Asia bound shipments which are unable to travel due to escalating tensions in the Gulf region.
Of these, 3000 containers have Basmati rice while 1000 containers are loaded with bananas and grapes which are prone to perish if not promptly disposed.
“We are in talks with global shipping lines to take perishable cargo to Dubai, Saudi Arabia, or Oman,” a government official present at the meeting said. 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 rise citing spike in insurance premium and fuel costs. The shipping industry also requested for an Indian Navy cover to escort their stranded vessels from the conflict area.
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 region and three vessels in the Gulf of Aden are being continuously tracked at hourly intervals.
The Ministry also reviewed the status of vessels and cargo bound for Gulf Cooperation Council (GCC) and West Asian destinations. “Ports have been directed to extend all necessary assistance to minimise hardships faced by exporters and ensure continuity of EXIM trade,” the statement said.
