Shipping laws must be relaxed to boost maritime capabilities

India’s shipping policy aims to reduce the dependence of external sea borne trade on foreign shipping services. The cabotage regulations in India through the Merchant Shipping Act, 1958, have reserved coastal trade exclusively for national flag vessels, thereby restricting the operation of foreign vessels in Indian waters, enabling payments to be made more easily.

The implementation of cabotage regulations ensures the availability of reliable domestic shipping services and the existence of maritime capability, which is subject to government control in times of war and national emergency.

While there is no blanket prohibition on the carriage of coastal cargo by foreign flagged vessels, such services are regulated and require the director general’s approval. A foreign flagged vessel is permitted to arrive at an Indian port to unload and load cargo, but should return without loading/unloading cargo at any other Indian port.

Shardul Thacker is a partner with Mulla & Mulla & Craigie Blunt & Caroe in Mumbai.