In your interest.
Online Personal Finance Magazine
No beating about the bush.
The writer talks about the latest government measure to relax cabotage and its dire implications on the shipping industry which could be non-existent within a decade
A few weeks ago, the Government of India, in its wisdom and consideration, released a press note on relaxation of cabotage, around the same time that the Indian prime minister visited Kerala and made other announcements which took precedence in the national media. The relaxation is currently applicable only for the new and not fully functional International Container Transhipment Terminal (ICTT) at Vallarpadam, Cochin.
Here is the link to the official announcement: http://pib.nic.in/newsite/erelease.aspx?relid=87542
It is interesting to note that, as of now, there is still no formal notification on this subject from the offices of the Directorate General of Shipping, the ministry, or any other agencies and authorities involved, including Indian Customs and Central Excise. It is unknown how ship-owners, operators and their agents are going to actually implement it.
Moneylife has, in the past, written on this subject, which can be accessed through these links:
What is the current view on cabotage in India? Is it as simple as domestic-versus-foreign, left-versus-right, or is it much deeper?
Within some segments of what could be called unbiased, right thinking, senior government sources, there is now something like a sense of dismal fatigue at this spate of announcements, one after another, which reflects a steady erosion in the steps taken and battles fought for our economic freedom and strengths. The refrain this writer got from more than one person was that national interest as well as basic common sense was not, in the least, a consideration taken into account when this announcement was made. In one specific case of a very senior person in the government shipping authorities, there was disgust that the shipping industry in India had been slaughtered to such an extent that there was no fight left in anybody who tried to revive it.
Within those who stand to benefit the most are the port operators and carpet-baggers; there’s an obvious feeling of glee and victory amongst these entities. It is a question of time, according to them, before relaxation of cabotage is extended to the other ports too. However, the deeper issue here is that some of them are not sure how their terminals and ports will perform even after cabotage is relaxed. In this case, a pertinent question arises—how would they then explain matters to their masters?
The state government concerned in this specific case, Kerala, has long been using the issue of cabotage as a whipping boy and touted for its removal of which was supposed to be the cure for all ills. There is apparently more than surprise on its eventual relaxation, tempered, however, by the reality that this opens doors for more business if it does succeed. The current level of co-ordination between the state government and central bodies like the customs, for example, is still an open issue. It does not help that the luxury cruise industry has quietly withdrawn from Kochi Port, citing difficulties in handling the multiple authorities, which will continue to be the case with cargo shipping also.
The list goes on.
For Indian seafarers, fewer jobs on Indian flagships means the line of jobless seafarers grows to unprecedented levels. Coupled with fewer people joining this profession, it is not difficult to foresee how, in a decade or so, there will be shortage of young, competent and qualified Indian seafarers. This is because there will be hardly any domestic shipping industry to induct seafarers in the first case. Likewise, the revival of the Indian ship-building industry has gone for a toss as low-grade and sub-standard tonnage of all sorts flows within a lax regime that has always gone easy on flag of convenience (FOC) rust-buckets, for obvious reasons.
There is also the issue of multiple laws, rules, regulations which prevail on the still unsolved issue of coastal shipping. Whether foreign flag or Indian, each one of them will want their pound of flesh and it is interesting to note that the official document, on how the relaxation of cabotage is implemented, is yet to surface. There are bound to be legal issues but the larger side-effect will be those who were looking at getting into coastal shipping, or are already there, will think twice.
What is this writer's view?
Put it this way, relaxing cabotage is like leaving the larder open for the rats to come in so the door had to be locked. Cabotage is implemented very seriously and strictly in countries like the US, Canada and EU. However, there is nothing left in the larder and hence no option but to leave the door wide open, and hope that something magical will happen, to fill it up again. But there is nobody left to ensure that somebody else does not take charge of the larder itself. If the office of the Directorate General (DG) of Shipping, which is supposed to be the nodal authority for taking Indian shipping forward, does not have an independent view of cabotage then what can anybody say? Might as well rename it to “DG FOC” and get along with life.
Relaxation of cabotage in this day and age is yet another reminder that those who do not learn from history are forced to repeat it. Do read up on how the Knights Templar and Freemasons, Clive, Hastings and Yale, for example, fought their way down Khambat, Konkan, Malabar, then up the Coromandel, Hooghly and then along the Ganges, controlling all avenues of water-borne trade. They destroyed those who resisted, with total local support. Oh yes, they were given titles, gun salutes, inducted into secret societies, and whatnot. India went back by centuries.
Indian shipping has been shot in the guts by those who swore to uphold it but chose to sell out instead.
(Veeresh Malik had a long career in the Merchant Navy, which he left in 1983. He has qualifications in ship-broking and chartering, loves to travel, and has been in print and electronic media for over two decades. After starting and selling a couple of companies, is now back to his first love—writing.)