The Union government has granted a six-month extension to implement its January 21 decision to withdraw key cabotage relaxations for foreign-flagged vessels, citing ongoing global uncertainties impacting shipping operations.
The rollback of the three “general orders” issued in 2018—allowing foreign ships to carry export-import (EXIM) containers, empty containers, and select bulk commodities on domestic routes without a licence—was originally set to take effect from April 21 after a three-month transition period. The new extension provides temporary relief to global shipping lines and transshipment terminal operators.
In an order dated March 31, the Ministry of Ports, Shipping and Waterways said the decision followed stakeholder consultations and a review of prevailing geopolitical and market conditions. The ministry described the extension as a “one-time, exceptional, temporary and situation-driven measure” aimed at ensuring operational continuity and stability in container shipping.
India’s cabotage laws reserve coastal shipping for Indian-flagged vessels, permitting foreign ships only when local capacity is unavailable. The 2018 relaxations were introduced to reduce reliance on foreign transshipment hubs, lower logistics costs, and improve container availability.
However, a recent government review found that the policy had not significantly reduced the transshipment of Indian cargo through overseas ports nor lowered costs for exporters and importers. As a result, the January 21 order proposed withdrawing the relaxations as part of broader efforts to promote Indian-flagged shipping.
The proposed rollback triggered strong opposition from global shipping lines and port operators. Industry players raised concerns over disruptions to vessel deployment, route planning, and rising insurance costs amid heightened geopolitical tensions, particularly in the Persian Gulf region.
Major operators such as Adani Ports and Special Economic Zone, which runs the Vizhinjam International Transshipment Terminal, and DP World, which operates the Vallarpadam terminal at Cochin Port, are among those set to benefit from the temporary reprieve.
Shipping giant Mediterranean Shipping Company had earlier warned of shifting its transshipment operations away from Vizhinjam if the cabotage benefits were withdrawn too quickly.
The extension reflects the government’s attempt to balance long-term strategic goals of boosting domestic shipping with the immediate need to maintain stability in a volatile global trade environment. Industry stakeholders, however, continue to seek a more gradual transition timeline to adapt to the proposed regulatory changes.
