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The crew of MV Princess Miral abandoned the ship following a breach in the hull, which led to ingress of water, and the vessel ran aground on Tuesday.
Responding to a call for rescue, Coast Guard ships Vikram and Amartya braved rough waters to reach the foreign vessel and rescue the crew, the ICG release said.
The vessel was carrying 8,000 tonnes of steel coil from Tianjin in China to Beirut in Lebanon.
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Dakshina Kannada deputy commissioner K V Rajendra said the vessel ran aground five to six nautical miles away from the Ullal shore.