Experts say that relaxation in cabotage law will benefit the industry

The relaxation will certainly benefit, to begin with, the Vallarpadam terminal in Kochi. The Government has to take this strategic move, though late on the one hand, and also opposed on the other hand, primarily to attract cargo from transshipment ports such as Colombo and Singapore. A transshipment terminal that handles large mother ships must have feeder vessels which are deployed to transport cargo from and to destinations near about. The Vallarpadam terminal could not turn out an effective competitor to the transshipment ports like Colombo since the domestic lines do not have sufficient capacity and so the volume of cargo handled at Vallarpadam was very much affected. To tide over the difficulty, the Vallarpadam terminal sought relaxation in the cabotage law, thereby allowing the foreign vessels to provide feeder services to the terminal. Of course, the relaxation is subject to a review after three years; its implication is not difficult to find. Unless the Vallarpadam terminal proves that the relaxation has brought in sufficient volume of transshipment, the relaxation is likely to be withdrawn. The authorities are confident of achieving growth enough to justify the relaxation. There is also another view which looks upon this relaxation as only a beginning leading to a total relaxation of the cabotage regulations. The view justifies its stand on the score of maximum utilization of the country’s long coastline of 7500 kilometres. As of now, the coastal shipping accounts for barely 7% of local freight movement while it is 15% in US and more than40% in Europe.

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