Shipping Ministry Retains 2018 Relaxations for Foreign Ships in Coastal Trade

NEW DELHI — India’s shipping sector will continue to see foreign-flagged vessels operating in coastal trade, following an order by the Shipping Ministry issued on August 10. The directive restores the relaxations originally introduced in 2018, which permit foreign carriers to transport specified categories of cargo between Indian ports.

The latest decision effectively rescinds two orders issued earlier this year in January and March, which had initially sought to reverse the 2018 policy and phase out foreign shipping lines from the domestic cabotage regime. According to the Ministry, the withdrawal of those earlier orders—extended through September—was designed to provide policy stability and operational certainty to India's maritime trade and logistics sector during a period marked by ongoing geopolitical developments and global shipping disruptions.

By maintaining the status quo, the government seeks to ensure that adequate shipping capacity remains available for exporters and importers navigating international supply chain constraints. However, the policy continuation means that domestic Indian-flagged shipping companies will not receive exclusive access to eligible coastal cargo and must continue facing competition from foreign carriers.

Industry experts have offered mixed reactions to the move. Jagannarayan Padmanabhan, Senior Director and Global Head-Consulting at Crisil Intelligence, noted that the decision maintains status quo for shippers and shipping companies, preventing another regulatory transition. At the same time, he pointed out that Indian-flagged operators will continue to compete alongside foreign carriers for eligible coastal cargo.

Maritime trade expert Rajesh Menon supported the arrangement, stating it remains necessary to guarantee adequate vessel availability for India’s export-import trade amid grim global geopolitical conditions. Conversely, a former department official questioned the policy reversal, noting that restoring orders previously deemed ineffective after a government review raises questions about long-term regulatory planning, despite the stated goal of ensuring operational certainty.

"The Ministry's decision to maintain status quo on foreign vessel relaxations highlights the delicate balance policymakers must strike between protecting domestic shipping lines and ensuring uninterrupted capacity for import-export trade during global uncertainties. While Indian-flagged operators will face continued competition, operational stability remains crucial for logistics and supply chain continuity in the near term." — Dr. Shishir Gupta, Founder & CEO, StartupLanes