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The Planning Commission has favoured relaxation of Cabotage law for at least three years for exim containers handled at Vallarpadam terminal.
A letter written by the Advisor (Transport) of the Planning Commission to the Shipping Ministry said that the Commission was of the view that the Cabotage policy can be initially relaxed in respect of exim containers for a period of three years after which, a review may by undertaken regarding further relaxation of the policy.
This was conveyed by the Deputy Chairman of the Planning Commission to Prof K.V. Thomas, Union Minister of State for Food and Consumer Affairs.
Coastal shipping
The Planning Commission also suggested that the Shipping Ministry should come out with a policy for encouraging coastal shipping so that multi-modal transport could be developed and pressure on roads could be reduced.
There has been a growing demand from the shipping community, DP World and the Kochi Port for the relaxation of cabotage law allowing foreign flag carriers to carry cargoes between Indian ports.
The existing Cabotage rules mandated by the Merchant Shipping Act, 1958 stipulate that the movement of containerised cargo between domestic ports should be undertaken only on Indian flag vessels.
Sources in the shipping fraternity pointed out that the Vallarpadam container transhipment terminal could be developed as a transhipment only if the foreign flag vessels are permitted to carry export/import transhipment containers from any of the Indian ports to the ICTT or vice-versa.
The Vallarpadam terminal was developed as the first Indian transhipment port by the government.
The country's container traffic is estimated at more than 70 lakh a year.
Of this, 40 per cent are now transhipped in Colombo, Dubai and Singapore.
Every container transhipped through a foreign port incur additional cost of about Rs10,000, they pointed out.
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