SIMA Pleads With Centre To Relax Cabotage Laws

Trade & Policy

SIMA Pleads With Centre To Relax Cabotage Laws

Shipping of cotton by foreign carriers within the Indian shorelines from Gujarat to the southern port lines are facing major constraints due to the existing Cabotage laws, which the Southern India Mills’ Association is seeking to be relaxed.

SIMA advocates that the government relax the cabotage laws for the movement of cotton from Gujarat to Tamil Nadu by the sea route. To bring down cost of transporting cotton, this demand from SIMA has been long pending with the government.

The Southern India Mills Association made a representation to the centre, stating, “The Ministry of Shipping had taken several steps to enable coastal movement of cotton from Gujarat to Tamil Nadu. Textile processing facilities are spread across clusters in different States and hence, transport cost is the key to determining the cost competitiveness of the industry.”

“Against this background, we request you to kindly relax the cabotage rule in respect of cotton transport from either Mundra or Pipav Ports to Thoothukudi, Kochi, Chennai and Krishnapatnam Ports,” the association mentioned.

Nearly, 60% of the spinning capacity in the country comes from the southern states. The cause for relaxation of cabotage laws is further augmented by the cat that a substantial volume of the raw cotton comes from Gujarat and Maharashtra. SIMA expressed the sentiment that there is scope for 50% reduction in cost if cotton is moved by ship instead of lorries as is done currently.

SIMA chairman P Nataraj said, “Every year, mills in Tamil Nadu buy 60 lakh to 70 lakh bales of cotton from Gujarat. This cotton comprising mainly Shankar 6 Variety is popular for use in hosiery items.”

For the past two years, Indian flag vessels have been moving a miniscule portion of 70 lakh bales, nearly 10 lakh bales by ship from one domestic port to another. Industry sources disclosed that “Once these cabotage rules are relaxed, foreign flag vessels will be in a position to move cotton from one Indian port to another at very competitive prices.”