Union Shipping Secretary Gopal Krishna on Tuesday said relaxation of cabotage for foreign-registered vessels has helped reduce coastal shipping rates and Indian seaports like Krishnapatnam and Visakhapatnam are attracting a share of cargo which was previously transhipped at Singapore or Colombo.

The Centre relaxed cabotage for foreign registered vessels in May. It allowed foreign liners to pick up cargo en-route. Shipping Line Maersk has already opened coastal links between Kolkata- Paradip and Kattupalli port of the Adani group in Chennai to facilitate coastal shipping.

“We are getting back the cargo,” Krishna said. According to him coastal shipping failed to grow due to various restrictions involving the ownership of ships, which in turn impacted the availability of ships. The cabotage relaxation has “impacted” the supply.

However, to further promote the sector which would benefit consumers in terms of lower logistics cost, India should do away with the restrictions.

“Currently an Indian citizen cannot charter a foreign flag vessel. This policy is not helping the consumer and is preventing competition and restricting market growth,” he told BusinessLine.

Krishna, who was in the city to flag off the private public partnership of Garden Reach terminal of Inland Water Authority of India (IWAI), said integrating coastal shipping with the inland river transport will open a host of logistics opportunities to trade.

The Ministry recently allowed movement of inland vessels within five nautical miles off the coast. A host of agreements were also signed with Bangladesh earlier this month to promote coastal shipping and extend the scope of inland river transport protocol by adding new routes and ports.

“We had protocol routes upto Karimgunj in Assam. Now we extended it to Silchar (Assam) and restored the pre-Partition route between Dhulian (Murshidabad, West Bengal) and Rajshahi. We are also exploring the possibility of opening a new link through Gomti river to connect Sonamura in South Tripura,” he said.

Inland water transport

The IWAI Chairman Pravir Pandey explained that with the passage of the 2016 National Waterways Act the agency is focussing on the dual agenda of building the national waterways and developing feeder channels to make end-to-end movement of cargo possible.

In two separate developments today, the Kolkata Port Trust handed over the Garden Reach Terminal, comprising three jetties, to IWAI and the latter awarded it to private partner Summit Alliance for operation and maintenance.

Pandey said while user interest in waterways is rising, there are not many vessels to cater to the need as private entrepreneurs are waiting for the infrastructure to be ready. To break ground IWAI has pressed its own vessels into service and will soon invite tenders for procuring 20 vessels.

“We do not intend to be a vessel operating agency. We are merely doing this to showcase the potential. In the long run private interests should dominate,” Pandey said.

According to him, the Varanasi terminal of the ₹5,369-crore Ganga Jal Marg project will be inaugurated by November or December and Sahibgunj terminal in Jharkhand will be ready in March next.