Centre softens cabotage law for 5 years to harden foreign hand
15 Sept 2015 5:30 AM IST
The development comes in the wake of long standing demand of the shipping industry for relaxation of the cabotage law. Cabotage is <g data-gr-id="37">transport</g> of goods between two points in the same country.
"The central government has decided to relax cabotage for special vessels such as Roll-On Roll-Off (Ro-Ro), Hybrid Ro-Ro, Ro-Ro cum Passenger, Pure Car Carriers, Pure Car and Truck Carriers, LNG vessels and Over-Dimensional cargo or Project Cargo Carriers for a period of five years," Shipping Ministry said in a statement.
With this relaxation, vessel operators will be allowed to bring foreign flagged vessels of this category to ply on the coastal routes, it said. "Such special vessels are in short supply in the country but since they cater to specific class of cargo, their availability will make it possible to shift cargo movement for these commodities from road and rail to coastal shipping," it added.
The government said <g data-gr-id="35">availability</g> of Ro-Ro vessels is essential for the success of efforts to develop coastal shipping and decongesting roads and railways.
"As an example, large automobile clusters exist at Manesar and around Chennai. Large numbers of cars are transported from north to south and vice-versa. It is possible to shift <g data-gr-id="34">major</g> part of this transportation to coastal shipping," it said.
Not only would <g data-gr-id="43">availability</g> of Ro-Ro vessels decongest roads/railways, it would also enable a green mode of transport reducing fuel intensity and also reduce carbon emissions, the statement said. So far, the cabotage policy in India allows first preference to Indian flagships over cargo and foreign ships. Cargo and foreign ships are allowed only when no suitable Indian flag vessel is available for the same.
Indian importers and exporters use Colombo, Salalah, Singapore and Dubai hubs for shipments adding to their costs. Industry experts say relaxation in the cabotage policy is expected to bring more trade to major ports in India. At present about 60 per cent of India's exports and imports containers are transshipped through ports like Singapore and Colombo.
This transshipment through ports outside the country involves not only huge expenditure but also extra 7-10 days of transit time. Transshipment is the shipment of goods or containers to an intermediate destination, and then from there to yet another destination.
India at present has 12 major ports which fall under Centre's jurisdiction and about 200 non-major ports under the control of states.
Arun <g data-gr-id="116">jaitley</g> on overdrive to good-humour foreigners
Finance Minister Arun Jaitley on Monday assured global investors of the “fairest and predictable taxation regime” as he invited them to invest in various sectors, including infrastructure, manufacturing and defence. He was optimistic that Indo-US bilateral trade will surge five times to $500 billion in the next few years on the back of growing cooperation between both the nations. Jaitley was speaking at the 11th Indo-US Economic Summit, which was organised ahead of the Prime Minister Narendra Modi’s second visit to the US later this month. US Ambassador to India Richard Verma was also present. India’s fundamentals are sound even amid the global turmoil, Jaitley said, adding that the government has been working on strengthening real economy by focusing on quick <g data-gr-id="120">decision making</g>, stable policy regime, predictable taxation system and improving on ease of doing business.
“The last two are work in progress,” the minister said. Elaborating on taxation, he said, the government has tried to resolve the legacy issue by governmental decisions, legislation or even by accepting <g data-gr-id="118">judicial</g> mandate. The government has tried to “put each one of these (taxation) issues to rest so that from the regime, which had earned an adverse reputation... we can evolve into fairest and predictable taxation regime in India”.
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