Foreign flagged ships have been allowed to transport fertilisers between Indian ports without a licence as the Centre freed yet another cargo from a law that reserved this business for Indian flagged ships.
“A foreign flag ship is not required to obtain a license from the Director-General of Shipping for engaging in the coasting trade of lndia for carriage by sea of fertilisers,” Sanjay Mital, Under-secretary in the Shipping Ministry, wrote in an order issued on June 22.
The Indian cabotage law states that only Indian registered ships are allowed to ply on local routes and foreign ships can operate along the coast only when Indian ships are not available.
Fertiliser is the seventh item to be freed from cabotage restrictions. In May, foreign flagged ships were allowed to transport export-import laden containers meant for transhipment, empty containers meant for re-positioning, agriculture, horticulture, fisheries and animal husbandry commodities on domestic routes.
The cabotage relaxation granted to foreign flagged ships for carrying fertilisers specified in the Indian Trade Classification (ITC), Harmonised System (HS) of the Director General of Foreign Trade, Ministry of Commerce and Industry, along local routes is conditional on the commodity contributing to at least 50 per cent of the total cargo on board the ship.
Such a caveat was prescribed while allowing foreign flag ships to carry agriculture, horticulture, fisheries and animal husbandry products. The cabotage relaxation for fertilisers was taken “in public interest and for Ease of Doing Business”, the Ministry said. The National Perspective Plan of the Government’s Sagarmala program estimates that about 6-7 million tonnes of fertilisers a year could be moved by sea on local routes.
A Ministry of Agriculture and Farmers Welfare-mandated committee on Doubling Farmers’ lncome, had recommended a strategy to enable farmers compete on a global scale. The panel, in its report, favoured application of a balanced dose of fertilisers on the basis of soil health as a requirement for reducing the cost of production, arguing that unavailability of fertilisers in the desired quantity, type and cost is a disadvantage for farmers.
Local fleet owners, hit by an unfavourable operating environment compared with foreign flagged ships, have flayed the Government’s decision to relax cabotage, indicating that they would be left with no choice but to register their ships outside the Country.