Home >Politics >Policy >Curbs lifted on foreign ships carrying cars

The government has lifted curbs on foreign registered, specialized car-carrying ships to operate in Indian waters in a bid to help shift movement of such cargo from more costly options such as roads and railways.

The so-called cabotage law makes it mandatory to use Indian ships to transport cargo between different ports along the country’s coast. Foreign ships are allowed to operate only when Indian ships are not available, after obtaining a licence from India’s maritime regulator.

Cabotage restrictions are applicable in most countries to protect the domestic shipping industry from foreign competition as well as for the purpose of national security.

“The shipping ministry has issued an order relaxing cabotage for specialized ships such as roll-on-roll-off, pure car carriers, pure car and truck carriers, liquefied natural gas vessels, over-dimensional cargo and project cargo carriers which are in short supply in the country but which have potential to shift cargo away from the roads and railways to coastal shipping in order to increase coastal traffic movement, for a period of three years," a spokesman said.

“There is no disagreement between Indian fleet owners and the government on this matter because there is no competition from local ship owners in this sector," the spokesman added.

“The relaxation will help pure car carriers start services connecting the east and west coasts of India and divert cars now being transported by road and rail to the sea route," said M.A. Bhaskarachar, chairman and managing director of state-owned Kamarajar Port Ltd, which runs the Ennore port near Chennai, which is home to several carmakers.

While Indian fleet owners do not run such specialized ships, there is potential for transporting around 105,000 cars annually using specialized ships on the Gurgaon-Mundra-Cochin, Pune-Mumbai-Chennai and Pune-Mumbai-Cochin routes, according to the ministry. Increased availability of these vessels is needed to meet the growing coastal movement of goods.

In the long run, Indian ship owners will need to be encouraged to acquire such specialized vessels, the spokesman said, adding, “As an interim measure, cabotage restriction is being relaxed on foreign-registered ships of these categories."

In March, the shipping ministry flagged off a scheme that gives incentives to cargo owners, consignors and consignees when they transport certain identified bulk commodities, containerized cargo or automobiles through Indian vessels, on trips having either a major port (owned by the Union government), a designated non-major port (owned by state governments) or an Inland Waterways Authority of India terminal/jetty as the point of loading or discharge.

The scheme also covers transportation of vehicles through roll-on-roll-off vessels wherein cargo owners shall be eligible for incentives of 300 per two-wheeler vehicle, 600 per three-wheeler vehicle and 3,000 for other vehicles.

These commodities have been identified on the basis of their low levels of transportation through coastal and inland waterways.

The government has set aside a budget of about 300 crore for the scheme which will run from 1 April 2015 to 31 March 2017.

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