‘More liberal’ India ends licence requirement for box ship reflagging

© Vectomart As its emerging economy pursues maritime-driven growth, India appears willing to simplify the regulatory system for foreign-flag containerships operating out of the country. Reflecting a more liberalised approach, the Indian authorities have scrapped a licensing requirement for vessels chartered by foreign lines through local entities registered in the new business district in Gujarat State better known as “GIFT City”. Business units operating on the financial centre have multiple regulatory advantages – more particularly, significant tax exemptions – and several mainline and shortsea container lines reportedly already have presence at GIFT City, including CMA CGM, Maersk, and Unifeeder. And, acting on that strength, several container line heavyweights have implemented vessel reflagging in India – six changes by CMA CGM and twoby Maersk. The French shipping giant remains particularly upbeat on India. While reflagging one vessel the Marseille-based carrier said: “With India playing an increasingly important role in the global trade, CMA CGM remains dedicated to supporting the country’s maritime ecosystem and contributing to its economic development through strategic initiatives and enhanced service offerings. “India represents a strategic market for the CMA CGM group,” it added. MSC and Hapag-Lloyd have promised to follow suit in local tonnage development, according to sources. The move to abolish a licensing requirement that involved considerable documentation for each call seeking to enter Indian waters is a significant policy relaxation, aimed at pushing the “ease-of-doing-business environment” for investors. And industry sources claimed it would allow “greater operational flexibility” for carriers. The exemption also builds on other policy reconfigurations. New Delhi recently agreed to continue with the cabotage law waiver for foreign vessels, after moving to revoke the 2018 policy reform earlier this year. The liberal regime permits foreign lines to move transhipment cargo and empty boxes between Indian ports without restrictions, a great enabler in the context of ever-increasing trade volatility. However, despite the cabotage rule modification, Indian coastal trades remain the domain of vessels registered locally.