Press Information Bureau

Government of India

Ministry of Shipping

17-March-2016 14:00 IST

The Government has relaxed cabotage restrictions for ports which transship at least 50% of the container handled by them. The cabotage relaxation will enable shipping lines to consolidate Indian EXIM and empty containers at transshipment ports in India for onward transportation to destination ports by main shipping lines.

With the cabotage relaxation, foreign vessels can also transport EXIM and empty containers from any port in India to transshipment port and vice versa, in addition to Indian vessels. The spare capacity of the foreign flag ships which could not be utilized earlier due to cabotage restrictions will now be gainfully utilized 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 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. New transshipment ports will have a gestation period of one year and shall have to achieve the stipulated transshipment traffic of 50% of the traffic handled in the second year. If the container port is able to achieve transshipment traffic of 50% of the cargo handled, the cabotage relaxation for such container port will continue.

Inability of the port to transship at least 50% of the containers handled in a year shall result in revocation of the said relaxation. The port whose relaxation is revoked shall not be considered for cabotage relaxation for next three years. The container handling port will also be required to provide monthly container traffic data for monitoring to Directorate General of Shipping and Ministry of Shipping by 5th of the following month.

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NP/RS

Cabotage relaxation enables foreign vessels to carry containers to designated transshipment ports subject to meeting transshipment thresholds and reporting. Relaxation of cabotage is authorized for container ports that transship at least 50% of EXIM and empty containers, allowing foreign-flag vessels to carry such containers between Indian ports and transshipment ports alongside Indian vessels. New transshipment ports have a one-year gestation and must meet the 50% threshold in the second year. Failure to maintain the threshold leads to revocation and a three-year bar on reconsideration. Designated ports must supply monthly container traffic data to the Directorate General of Shipping and the Ministry of Shipping by the fifth of the following month for monitoring.