India Cabotage Rollback Delayed, Salalah Disrupted, Karachi Rising: What Changed on Indian Ocean Trades

Key Takeaways

India delayed its planned rollback of cabotage relaxations by six months, pushing the new effective date to October 2026. The original April 21 deadline would have reinstated Indian-flag-only rules for coastal container movement.
The delay is a direct response to the Middle East crisis. Indian ports are absorbing rerouted Gulf-bound cargo, and foreign carriers need continued access to coastal routes to manage the overflow.
Salalah, a key transshipment hub for India-Europe and India-US East Coast trades, has faced repeated operational shutdowns due to drone strikes. A crane was damaged, and MSC has suspended export bookings from both Salalah and Sohar until further notice.
Hapag-Lloyd has redirected India-USEC sailings to call at Port Qasim (Karachi), reinstating a Pakistan port call that was dropped last year due to India-Pakistan trade restrictions.
Karachi handled more transshipment TEUs in the first 24 days of March 2026 than in all of 2025 combined.
OOCL is launching a new Southeast Asia-to-India/Pakistan service in late April, adding Karachi to a loop with Singapore and Port Klang.
For shippers on Indian trades, the routing map has shifted. Transshipment hubs, feeder connections, and inland options are all in flux.

Who This Is For

This post is for freight forwarders, importers/exporters, and operations teams with cargo moving to, from, or through India, Pakistan, or the broader Indian Ocean region. If your shipments transship via Salalah, Jebel Ali, or any Gulf hub, or if you ship on India-Europe or India-US services, the changes below affect your routing and scheduling.

The Cabotage Backstory

In January 2026, India’s Ministry of Ports, Shipping and Waterways announced it would reverse the cabotage relaxations that had been in place since 2018. Those relaxations allowed foreign-flagged vessels to carry EXIM containers, empty containers, and select bulk commodities on India’s domestic coastal routes. The rollback was scheduled for April 21, 2026.

The Ministry’s stated reasoning: the relaxations had not achieved their intended goals. Stakeholders reported that freight costs had not declined as expected, container shortages persisted, foreign carriers engaged in “predatory practices,” and India’s own flagged container fleet had stagnated.

Carrier groups pushed back hard. The Container Shipping Lines Association (India) argued that the relaxations had increased transhipment at Indian ports, improved equipment availability for exporters, and driven more vessel calls and port revenue. Ports like JNPA, Mundra, and the under-development Vizhinjam hub had built their transshipment strategies around the assumption that foreign carriers could move boxes along the coast.

On March 31, the Ministry issued a six-month extension, pushing the effective date to October 2026.

Why the Delay Happened Now

The official rationale cited “stakeholder consultations and a review of prevailing geopolitical and market conditions.” In practical terms, the Hormuz crisis made the timing untenable for two reasons:

1. Indian ports are absorbing rerouted Gulf cargo. With Gulf ports like Jebel Ali functionally constrained (technically open but with limited vessel calls, rising dwell times, and yard congestion up to 7-10 days), carriers have been discharging Middle East-bound cargo at Indian ports including Mundra, JNPA (Nhava Sheva), and Kattupalli. This cargo then needs onward movement, sometimes by coastal feeder, to reach its final destination. Cutting off foreign carriers from coastal routes in the middle of this would have created an immediate bottleneck.

2. Transshipment hubs need foreign-carrier flexibility. Vizhinjam, India’s new deepwater transshipment port, is positioning itself as an alternative to Colombo and Singapore for Indian transshipment. Its viability depends on foreign mainline carriers being able to relay containers between Vizhinjam and other Indian ports. Reinstating cabotage restrictions would undermine that model at the worst possible time.

The six-month extension protects carrier operations during the crisis. But it also reopens the policy debate: if the relaxations prove essential during disruption, the argument for a permanent rollback weakens.

Salalah: From Hub to Vulnerability

Salalah, on Oman’s southern coast outside the Strait of Hormuz, has been a critical transshipment hub for Indian Ocean trades. Both Maersk and Hapag-Lloyd use it as a relay point for their Gemini Cooperation loops connecting India with Europe and the Mediterranean, as well as for standalone India-US East Coast services.

The problem: Salalah has been hit by drone strikes. Operations were suspended over the weekend of March 29-30 after a strike damaged a ship-to-shore crane. While the port has resumed operations intermittently, it is no longer a reliable hub.

MSC has temporarily suspended all export bookings from both Salalah and Sohar until further notice. MSC is arranging vessel connections for containers already discharged in India and Sri Lanka.

Hapag-Lloyd has redirected its upcoming India-USEC TPI service westbound sailings away from Salalah and toward Port Qasim in Pakistan. The vessel Niledutch Lion is scheduled to depart Mundra on April 7 and arrive Karachi on April 9, replacing a Salalah call originally set for April 11. A second vessel, Stephanie C, has also had its Salalah call (April 18) canceled, with Port Qasim substituted.

Maersk has not publicly detailed its contingency for Indian transshipment cargo affected by the Salalah disruption, though all Gemini India-Europe loop vessels on the relevant service are Maersk-operated.

India has responded on the customs side by streamlining transshipment procedures to ease pressure on ports receiving diverted cargo.

Karachi’s Emergence as a Transshipment Alternative

The most striking operational shift is Karachi’s rapid rise as a transshipment hub.

Port of Karachi handled 8,313 TEUs of transshipment cargo in the first 24 days of March 2026. That exceeds the roughly 8,000 TEUs of transshipment cargo the port handled in all of 2025. The Karachi Port Trust (KPT) has positioned itself as available for international carriers rerouting away from Gulf hubs.

This is operationally notable because Hapag-Lloyd and other carriers had dropped Karachi calls last year following restrictions on direct port access between India and Pakistan. Pakistani cargo had been moving via Salalah on feeder services. Now, with Salalah unreliable, carriers are bringing Karachi back into their rotations out of necessity.

OOCL is launching a new Southeast Asia-to-Indian subcontinent service on April 26, including Karachi on a loop with Singapore, Port Klang, and India’s west coast. This is OOCL’s first dedicated route linking Southeast Asia with India and Pakistan.

Whether Karachi’s role persists after the crisis depends on several factors: the speed of Salalah’s recovery, the trajectory of the broader Gulf situation, and whether Indian and Pakistani trade restrictions ease. But for now, it is absorbing transshipment volumes at a pace that was unthinkable six months ago.

What This Means for Shippers on Indian Trades

Transshipment routing is less predictable

If your cargo normally transships at Salalah, Jebel Ali, or any Gulf hub on an India-origin or India-destination routing, confirm with your carrier or forwarder where it is actually being relayed. The hub may have changed without a formal advisory.

Transit times may shift

Rerouting from Salalah to Karachi or to Cape of Good Hope adds time. India-Europe services transiting via Cape rather than Suez add 10-14 sailing days. Substituting Karachi for Salalah on India-USEC services may add or subtract time depending on the vessel’s rotation.

Equipment positioning is under stress

With cargo being discharged at Indian ports that were not the intended destination, empty container repositioning becomes more complex. Shippers may face equipment availability issues at Indian export gateways, particularly for reefer and specialized containers.

The cabotage extension provides temporary stability

For the next six months, foreign-flagged carriers can continue moving EXIM and empty containers between Indian ports. This matters for anyone whose cargo relies on coastal feeder connections or transshipment via Indian hubs.

Dwell times at Indian ports may rise

DHL’s operational updates flag dwell times increasing up to 10 days at some affected ports, with carriers issuing early voyage terminations, port omissions, and forced diversions. Standard or zero free time is being applied to diverted shipments, meaning storage charges can accumulate quickly.

Operational Note: When transshipment hubs shift, the containers most at risk are those already in transit. A box that was booked to transship at Salalah but arrives after the port call is omitted needs to be identified, rebooked, and tracked through whatever alternative the carrier arranges. Shipment-level visibility that connects booking data to vessel events helps operations teams catch these mid-voyage changes before they become customer-facing delays.

What to Watch

October 2026 cabotage deadline. The six-month extension can be extended again or made permanent, but the current order sets October as the next decision point. If the Gulf situation stabilizes, pressure to reinstate the rollback will return.
Salalah operational status. The port has resumed operations intermittently, but further strikes could take it offline again. Monitor Maersk and Hapag-Lloyd advisories for the Gemini loop and TPI service specifically.
Karachi capacity. Karachi is absorbing volumes far beyond its recent baseline. If this continues, congestion at Karachi itself becomes a risk. Watch for dwell time increases and berth waiting times.
OOCL’s new Southeast Asia-India-Pakistan service. Launching April 26. This adds new connectivity but also signals that carriers see the India-Pakistan routing shift as lasting long enough to justify a dedicated service.
Carrier advisories on India-Europe and India-USEC. Maersk, Hapag-Lloyd, MSC, and CMA CGM are all adjusting Indian trade rotations. Changes may come as individual voyage updates rather than broad announcements.