Centre’s Move To Relax Cabotage laws Welcomed By Cotton Industry

Trade & Policy

Centre’s Move To Relax Cabotage laws Welcomed By Cotton Industry

The Union government’s recent move to relax the cabotage regulations allowing foreign vessels to ply cargo between Indian ports has been unanimously hailed by the textile industry as this would result in the cheaper transportation of cotton from Gujarat to Tamil Nadu and other southern states in a big way.

P Nataraj, the chairman of Southern India Mills Association (SIMA) welcomed the move stating, this would benefit cotton farmers in Gujarat and the spinning mills in the southern states of Tamil Nadu and Kerala.

According to a statement he made to the media, “The mills in the State consume around 50 lakh bales of cotton grown in Gujarat every year as its fibre quality parameters are preferred by the knitted garment makers in Tirupur. But we were losing heavily on transporting the cotton.”

“During the peak cotton season, the lorry freight per bale between the ginning factories in Gujarat and spinning mills in Tamil Nadu can touch a high of INR 1,000, while the transportation cost for importing the fibre from West Africa worked out to be just INR 400/bale,” he explained.

“Consequently, the textile industry is forced to transport the cotton fiber by rail and ship. However, the price difference between lorry and these modes of transport turned out to be less than 10 percent prior to the relaxation of cabotage laws. This is what prompted the industry to seek relaxation of cabotage regulations for transporting cotton from Gujarat to Tamil Nadu. Now foreign flagged ships can carry cotton,” he concluded.

In the opinion of Nataraj, the foreign flagged ships will definitely be in a position to offer competititve freight rates for transportation of cotton between Gujarat and Tamil Nadu and other southern state ports, as there are quite a few empty foreign vessels plying the route currently.