<p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">India has opened its coastal shipping market to foreign-flagged vessels for a six-month period, granting a temporary relaxation of cabotage rules that had been scheduled for rollback, as the Hormuz crisis tightens vessel availability and drives up domestic freight costs </span><span class="">. The decision, reported by the Ministry of Ports, Shipping and Waterways, allows foreign ships to transport cargo between Indian ports along the coast, a function normally reserved for Indian-flagged vessels under the cabotage regime.</span><span class="_5f9bba8" data-citation-group="1" style="margin-left: 2px; margin-right: 2px;"><a href="https://economictimes.indiatimes.com/topic/cabotage-rule#1" target="_blank" rel="noreferrer" aria-label="9" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://www.maritimegateway.com/india-extends-cabotage-relaxations-for-foreign-flagged-vessels-by-six-months/" target="_blank" rel="noreferrer" aria-label="17" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The relaxation reverses a planned rollback that had been in preparation since January 2026. The government had decided to reinstate Indian-flagged vessel exclusivity for carrying EXIM containers, empty containers, and select bulk commodities on domestic routes, with the rollback originally scheduled to take effect from 21 April after a three-month transition </span><span class="">. A subsequent order dated 31 March pushed the effective date back to at least October 2026, citing stakeholder consultations and a review of prevailing geopolitical and market conditions. The current six-month breather extends that relief further </span><span class="">.</span><span class="_5f9bba8" data-citation-group="3" style="margin-left: 2px; margin-right: 2px;"><a href="https://economictimes.indiatimes.com/topic/cabotage-rule#1" target="_blank" rel="noreferrer" aria-label="9" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://www.maritimegateway.com/india-extends-cabotage-relaxations-for-foreign-flagged-vessels-by-six-months/" target="_blank" rel="noreferrer" aria-label="17" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The rationale is explicitly crisis-driven. The Ministry cited the need to alleviate predicted shortages in shipping resources and counter escalating freight costs linked to disruptions from the West Asia regional conflict </span><span class="">. Revoking the cabotage relaxations during an active maritime crisis would have removed vessel capacity from Indian coastal routes at a moment when the Hormuz disruption has already tightened vessel supply, and it would have created equipment bottlenecks for shipping lines trying to reposition empty containers across Indian ports to meet export demand </span><span class="">.</span><span class="_5f9bba8" data-citation-group="5" style="margin-left: 2px; margin-right: 2px;"><a href="https://economictimes.indiatimes.com/topic/cabotage-rule#1" target="_blank" rel="noreferrer" aria-label="9" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://www.maritimegateway.com/india-extends-cabotage-relaxations-for-foreign-flagged-vessels-by-six-months/" target="_blank" rel="noreferrer" aria-label="17" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The operational beneficiaries are the global shipping lines that have deployed vessels on India's coastal routes under the relaxed regime. Maersk, MSC, CMA CGM, and Hapag-Lloyd have all participated in coastal movements under the 2018 relaxations, and the extension provides them with operational continuity during the crisis </span><span class="">. Transshipment terminal operators at Vizhinjam, JNPA, and Mundra also depend on the flexibility of foreign-vessel coastal movements to manage the surge in transhipment cargo being rerouted through Indian hubs, making the relaxation a supporting measure for India's broader port competitiveness agenda.</span><span class="_5f9bba8" data-citation-group="7" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.maritimegateway.com/india-extends-cabotage-relaxations-for-foreign-flagged-vessels-by-six-months/" target="_blank" rel="noreferrer" aria-label="17" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The data on cabotage-exempted coastal cargo illustrates why the relaxation matters. The average number of foreign-flagged vessels participating in coastal cargo movement of exempted commodities rose from 74 per year in 2014–18 to 298 per year in 2019–25, while the cargo volume carried by foreign-flagged vessels on exempted commodities increased from 0.7 million tonnes to 4.7 million tonnes annually over the same period </span><span class="">. This correlation between vessel supply and coastal throughput suggests that restricting foreign participation would have an immediate contractionary effect on domestic cargo movement, at precisely the moment when supply chains are already stressed.</span><span class="_5f9bba8" data-citation-group="8" style="margin-left: 2px; margin-right: 2px;"><a href="https://betadgs.dgshipping.gov.in/download/1769691524_697b598415456_coastal-committee-report-final-jan2026.pdf#19#38#19" target="_blank" rel="noreferrer" aria-label="24" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">The long-term framework remains unresolved. The Coastal Shipping Act, 2025 established a new licensing architecture for foreign vessels engaged in coasting trade, and a draft Coastal Shipping (Licensing of Chartered Foreign Vessel) Rules, 2026 has been circulated for consultation </span><span class="">. The draft rules would require foreign vessels to obtain licences from the Director-General of Shipping, with verification criteria including vessel age, crew citizenship, safety and security concerns, and compliance with Right of First Refusal requirements for Indian vessels. The six-month relaxation operates alongside this evolving framework rather than replacing it, creating a period of regulatory dualism in which temporary crisis measures coexist with longer-term legislative reform.</span><span class="_5f9bba8" data-citation-group="9" style="margin-left: 2px; margin-right: 2px;"><a href="https://betadgs.dgshipping.gov.in/download/1762500625_690da0112f607_draft-coastal-shipping-licencing-of-chartered-vesselsrules-2026.docx#1#2#1" target="_blank" rel="noreferrer" aria-label="1" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://betadgs.dgshipping.gov.in/download/1767074392_69536a58851d6_draft-coastal-shipping-licencing-of-chartered-vesselsrules-2026.pdf#13#16#13" target="_blank" rel="noreferrer" aria-label="7" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">Separately, the Merchant Shipping (Regulation of Entry of Ships into Coastal Waters) Rules, 2026, which came into force on 24 September 2026, impose expanded compliance requirements on foreign vessels operating in Indian coastal waters, including P&amp;I insurance, classification certification, salvage contracts, and marine pollution response arrangements </span><span class="">. These rules apply whether or not the vessel enters an Indian port, and require documentation to be submitted at least 48 hours before port entry. The combination of the cabotage relaxation and the entry rules means foreign vessels can now operate more freely on domestic routes, but under a more demanding compliance regime than existed previously.</span><span class="_5f9bba8" data-citation-group="11" style="margin-left: 2px; margin-right: 2px;"><a href="https://www.maritimegateway.com/india-ship-entry-rules-add-salvage-and-pollution-response-checks/" target="_blank" rel="noreferrer" aria-label="15" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a><a href="https://teamleaseregtech.com/updates/article/59819/merchant-shipping-regulation-of-entry-of-ships-into-coastal-waters-rul/" target="_blank" rel="noreferrer" aria-label="26" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">For Indian shipowners, the relaxation represents a temporary competitive concession. The Directorate General of Shipping has previously proposed withdrawing the 2018 general orders, arguing they neither achieved their intended objectives nor supported the long-term health of India's shipping sector </span><span class="">. The current extension defers that debate, but the underlying tension between protecting Indian-flagged tonnage and ensuring adequate vessel capacity for domestic cargo remains unresolved.</span><span class="_5f9bba8" data-citation-group="13" style="margin-left: 2px; margin-right: 2px;"><a href="https://betadgs.dgshipping.gov.in/download/1769691524_697b598415456_coastal-committee-report-final-jan2026.pdf#19#38#19" target="_blank" rel="noreferrer" aria-label="24" style="color: rgb(57, 100, 254); transition: box-shadow 0.2s cubic-bezier(0.4, 0, 0.2, 1); border-color: rgba(255, 255, 255, 0); border-width: 2px 3px; margin-left: -3px; margin-right: -3px; text-decoration: none; position: relative;"></a></span></p><p class="ds-markdown-paragraph" style="margin: 16px 0px; color: rgb(15, 17, 21); font-family: quote-cjk-patch, Inter, system-ui, -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif; font-size: 16px;"><span class="">Looking ahead, the six-month window provides breathing space but not certainty. If the Hormuz disruption persists beyond the relaxation period, the government may face pressure to extend it again, further delaying the cabotage rollback. If the crisis eases, the rollback could proceed, potentially creating another capacity shock for coastal routes. For shipping lines and shippers using India's coastal network, the immediate implication is continuity: foreign vessels remain available for domestic cargo movements, at least through the current period, while the longer-term regulatory framework continues to evolve.</span></p>