Pratik Bijlani – The Directorate General of Shipping (DGS) in India is finalizing groundbreaking regulations that will require international container lines operating in Indian waters to reserve at least 5% of their cargo space for Indian domestic operators. This move is part of the Indian government’s broader strategy to enhance the competitiveness of Indian flag vessels and bolster domestic shipping capabilities. The new rules also extend to Vessel Sharing Agreements (VSAs), which are widely used by shipping lines to pool resources. Under these regulations, VSAs must allocate 5% of space for Indian-flagged vessels carrying domestic cargo, a move aimed at addressing the market imbalance that often favors international operators.
This initiative is expected to have national and international ramifications, particularly in the container shipping and logistics sectors. By creating a more robust framework for domestic players, the DGS aims to increase the participation of Indian shipping companies in both global and domestic trade. Additionally, this could pave the way for a more competitive shipping landscape, while simultaneously promoting fairer allocation of cargo space and enhancing transparency within VSAs.
Public comments are being sought on the draft regulations, which are designed in accordance with Section 54 of the Competition Act, 2002. The draft not only focuses on strengthening domestic shipping but also addresses market challenges such as anti-competitive practices and ensuring fair representation for Indian shipping lines and Non-Vessel Operating Common Carriers (NVOCCs). If implemented, these regulations could significantly strengthen India’s maritime sector, providing greater opportunities for local operators while reducing dependency on foreign carriers. The initiative also aligns with India’s sustainability goals, offering benefits in terms of emissions reduction and improved operational efficiency.
Marex Media