| Date: |
09-06-2015 |
| Subject: |
Shipping ministry to "examine" relaxation of old cabotage laws, says Pon Radhakrishnan |
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CHENNAI: India is looking at relaxing its age old cabotage law to allow foreign ships to transport cargo between different ports along the country's coast with some riders, junior shipping minister Pon Radhakrishnan has said. "At this juncture I can say it is under serious consideration, though I cannot give a time when we may have announcements," he told ET on the phone on Monday.
Radhakrishnan, however, said the shipping ministry will "examine" the possibility of relaxing the cabotage law in such a way that the existing stakeholders are not affected adversely.
India's cabotage policy — which is part of the Merchant Shipping Act, 1958 — makes it mandatory to use Indian ships for transporting cargo between the country's ports. Foreign ships are allowed to operate only at times when Indian ships are not available. For that too, they have to take a licence from the country's maritime regulator.
Relaxing the cabotage law is a long-pending demand from scores of textile entrepreneurs in the Coimbatore-Tirupur belt who say it will lead to cumulative saving of Rs 175 crore a year for spinning mills in Tamil Nadu. The state's textile spinning industry, the country's largest with a capacity of 2.25 crore spindles, imports nearly 70 lakh bales of cotton from Gujarat every year.
"Many foreign ships sail near empty to Tuticorin after dropping off goods in Gujarat. Using these ships will save a lot of money for the industry and for the country as well in terms of diesel subsidies," said Prabhu Damodharan, secretary of Texpreneurs Forum, a group of businessmen that has been pushing for cabotage law relaxation.
In its submissions to the state government, Texpreneurs said cost for transporting one kg of cotton by foreign ships under a relaxed cabotage law would work out to Rs 3.3 against an Indian ship's Rs 4. By road, it will cost Rs 4.8.
Relaxation of cabotage law is expected to impact logistical costs of a whole range of industries from electronics to agricultural produce.
Indian ship operators, however, say any relaxation in the laws will be unfair towards the domestic shipping industry.
"There is a cost of operations that Indian shippers are subjected to, owing to some taxes such as the seafarers' taxation and so on. This is not the case with foreign vessels. If the government relaxes it more, domestic shippers will lose business and the government will lose tax revenue," said Atul Agarwal, president of Indian National Ship Owners Association and managing director at shipping company Mercator.
Source : economictimes.indiatimes.com
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