Cabotage rule relaxation: Govt needs to strengthen port infrastructure to make India a major transshipment hub
An order released by the shipping ministry in May 2018, liberalising the stringencies of the cabotage rule, has raised concerns among the Indian shipping industry.
With the ease in rules, ships registered in overseas destinations will be allowed to transport containers in Indian waters to transshipment hubs the world over without specific permits of licenses.
It is largely anticipated that the entry of foreign-flagged vessels will prompt policy-makers to take a hard look at the country’s maritime commerce policies. The government needs to raise the bar for Indian shipping lines and formulate policy measures to develop the competencies of Indian coasts for trade and industrialisation, drawing parallels with China.
India needs to take a leaf from China, which has emerged as a global maritime powerhouse in recent times with a specific focus on port-led economic development. With China operating 8 of the world’s 17 largest ports, a robust port infrastructure has helped the country enhance coastal trade connectivity and leverage its coastline to build dedicated coastal trade routes. Over the years, China has earmarked heavy investments in building a dense harbour network on a global level, extending it a much-needed competitive edge over other countries.