India abolishes its ‘Jones Act,’ could be role model for U.S.

by Jonathan Helton, Grassroot Institute, September 22, 2023

India has abolished its equivalent of the Jones Act — America’s 1920 U.S. maritime law that prohibits foreign shipping competition between U.S. ports and adds to American business and consumer costs.

According to news sources such as Splash 24/7 and the India-based National Herald, leading government officials in the world’s most populous country abolished their nation’s Jones Act-equivalent to spur development of its coastal shipping lanes.

The idea was to lower transportation costs and carbon emissions by shifting cargo transport along the country’s coastal areas from trucks and trains to ocean vessels.

As reported by Splash 24/7, coastal shipping has only a 7% share in India’s transportation mix, while road and rail hold 62% and 31% stakes, respectively.

In the National Herald, longtime India media expert Paranjoy Guhathakurta said that, “Until this change in policy took place on May 21, if a foreign ship wanted to transfer goods from one Indian port to another, it would need special permission. … Now this restriction has been done away with.”

As explained by Container xChange CEO Christian Roeloffs, “Foreign-flagged ships can now ply Indian coastal routes without the need for permits, injecting a fresh wave of competition into the market. This development is expected to drive down shipping costs and potentially boost India’s global trade presence in the long run.”

Previously, foreign-registered ships had to obtain permission to transport goods between Indian ports from the India Directorate General of Shipping, but only if no India-registered ships were available and the Indian National Shipowners’ Association didn’t object.

This new policy shift follows a change in 2018 that allowed foreign-registered ships to move agriculture-related and import-export cargo between Indian ports without a directorate license.