Abstract

Cabotage laws refer to the regulations and laws governing the inter-port transportation within a domestic country by a foreign shipping operator. The aim of this research paper is to examine the meaning and history of Cabotage Laws in India. It will investigate the evolution of these laws by understanding the various reforms and amendments it has undergone, and review the outcomes of the same. A critical analysis of key stakeholders and their interests with respect to cabotage shipping is needed to understand the impact of the relaxation or restriction of these laws. From an economic standpoint, it is necessary to evaluate the effect of cabotage laws on the growth of the Indian shipping industry, its export and import, and global trade competitiveness. A comparison of cabotage laws in India with policies of other countries is undertaken so as to deduce the effect of these laws on the dynamics of the shipping industry in the global context, and to gauge if insight can be gained to be incorporated in the formulation of India’s policies.  Following a thorough analysis of the legal framework of cabotage in India, the findings of this paper seek to suggest reforms to the existing system, to address its pressing issues as well as recommend measures that will allow the maritime industry to achieve sustained growth and development.

Introduction

In 2023, the Cabotage Laws of India were set to be abolished. These laws, which had previously been reformed in 2018, were now poised to be removed completely. Cabotage Laws are those laws that are concerned with shipping in the coastal regions of a country. The first cabotage laws were introduced by the Portuguese in the early 16th century to protect their coast from foreign ships. In the present context they refer to the set of laws and regulations that govern the transport of cargo and passengers between different ports in the territorial waters of a country. The principle of Cabotage in coastal nations is based on prohibiting foreign vessels from navigating and trading along their coastlines without permission and for clear, justified reasons. These laws, which were initially designed for protection of coastal regions, have evolved into a powerful tool which can be utilized to support indigenous shipping industries.

These laws are significant as regulations on foreign-owned or chartered vessels can impact a country’s trade competitiveness, its export-import logistics, and the overall economic growth of its maritime industry. India is a peninsular region surrounded by water bodies on three sides, with a coastline that is 7,500 km long, and having the prospect of 14,500 km long navigable waterways, yet the potential of these are not yet fully harnessed and utilised. Coastal shipping is also starting to gain traction as an alternative to rail and road transport owing to its lower costs and environmental sustainability. In this perspective, it is of paramount importance to assess the present situation and formulate suitable policy and law for India’s maritime and shipping sectors.

Maritime  cabotage  markets  represent  considerable  business  and  trade  potential,  particularly  in countries  with  longer  coast  lines  and  in  archipelagic  countries.  From  the  perspective  of supply  chain efficiency,  maritime  cabotage  can  be  of  interest  to  improve  door‐to‐door  services as  it  can  enhance efficiency in the logistic supply chain, promote the carriage of larger cargo volumes at lower costs and guarantee service continuity.  

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