India Mulls Easing Cabotage Permits for Foreign Boxships as Hormuz Crisis Threatens Coastal Capacity

India is considering a temporary relaxation of permit rules for foreign‑flag container ships in domestic coastal trades, as policymakers brace for a possible shortage of vessels and boxes triggered by the West Asia shipping crisis.

At a meeting called by the Directorate General of Shipping, officials and industry representatives discussed allowing more foreign‑flagged tonnage to move domestic and inter‑port EXIM containers along the coast, if disruptions from the Strait of Hormuz shutdown deepen in the coming weeks. A government arm warned there “may be a shortage of containers and vessels in the coming two weeks if the West Asia crisis persists,” and easing cabotage was floated as a stop‑gap solution.

Earlier this year, the DG Shipping had scrapped partial cabotage relaxations introduced in 2018 that let foreign ships carry EXIM boxes between Indian ports without specific licences, arguing the waiver had not achieved its aims and had hurt the growth of Indian‑flag container tonnage. Now, with about 38,000 West Asia‑bound containers stuck across Indian ports—including 3,000 containers of basmati rice and 1,000 of bananas and grapes—authorities are also drafting SOPs for handling stranded cargo and exploring alternative routings with global lines to Dubai, Saudi Arabia and Oman.

Exporters at the meeting sought simpler “back‑to‑home” permissions to sell stranded export cargo in the domestic market, even as they flagged spiralling freight and surcharge costs. The government has asked state‑owned ports to extend all possible assistance to minimise hardships and maintain EXIM flows, while weighing cabotage relief against its longer‑term goal of building a stronger Indian‑flag coastal and container fleet.