07/08/2025
The Coastal Shipping Bill, 2025 of India, passed by the Indian Parliament, aims to modernize and promote coastal trade by establishing a dedicated legal framework. Below are the key points of the Bill, based on available information:
Objective and Scope:
Consolidates and amends laws to regulate coastal shipping, promote coasting trade, and encourage domestic participation to ensure a coastal fleet owned and operated by Indian citizens for national security and commercial needs.
Applies to all vessels engaged in coasting trade, including Indian and foreign-chartered ships, covering ships, boats, sailing vessels, and mobile offshore drilling units, whether self-propelled or not.
Definition of Coastal Waters:
Coastal waters include India’s territorial waters (up to 12 nautical miles, ~22 km) and adjoining maritime zones (up to 200 nautical miles, ~370 km).
Licensing Regulations:
Indian Vessels: Removes the requirement for a general trading license for Indian-flagged vessels, reducing compliance burdens and promoting ease of doing business.
Foreign Vessels:
Prohibits foreign vessels from engaging in coastal trade without a license issued by the Director General of Shipping (DGS), with conditions supporting Indian shipbuilding and seafarer employment.
Licenses required for vessels not wholly owned by Indian citizens, NRIs, or OCIs, operating between Indian and international ports or between international ports. OCIs hiring vessels for operations exclusively outside India are exempt.
National Coastal and Inland Shipping Strategic Plan:
Mandates the central government to formulate a biennially revised National Coastal and Inland Shipping Strategic Plan within two years of the Act’s commencement to enhance route planning, traffic forecasting, and integration with inland waterways.
Promotes regional development in coastal states like Odisha, Karnataka, and Goa through integrated coastal and inland waterway transport.
National Database for Coastal Shipping:
Establishes a national database to ensure transparency, facilitate information sharing, and support evidence-based policy and operational coordination.
Integration with Inland Waterways:
Facilitates integration of coastal shipping with inland waterways to create a seamless multimodal transport network, reducing logistics costs and enhancing connectivity.
Permits vessels registered under the Inland Vessels Act, 2021, to engage in coastal trade under specific conditions.
Promotion of Domestic Participation:
Encourages Indian ownership and operation of coastal fleets to reduce dependence on foreign vessels, aligning with the “Make in India” initiative.
Expands eligibility for chartering vessels to NRIs, OCIs, and Limited Liability Partnerships (LLPs) to boost private sector involvement.
Economic and Environmental Benefits:
Aims to increase coastal shipping’s freight share (currently 5% compared to 40% in the EU) to reduce reliance on road (66%) and rail (31%), lowering logistics costs, traffic congestion, and pollution. Waterways are more energy-efficient, contributing less than 1% to India’s GHG emissions.
Supports green transport through measures like prioritised berthing, green clearance channels, and reduced GST on bunker fuel.
Penalties and Compliance:
Replaces criminal penalties with civil penalties, e.g., a fine of up to ₹5 lakh or twice the gains from violations for non-compliance with DGS directions (previously imprisonment up to 6 months and ₹1,000 fine).
Specifies compoundable offenses, including operating without a license, failure to provide information, or violating detention orders.
Empowers DGS to seek information, issue directions, and detain vessels for offenses like operating without a license or providing false information.
Support for Maritime Sector Growth:
Aligns with the Sagarmala program for better connectivity and infrastructure, promoting coastal shipping through dedicated berths and hinterland connectivity.
Supports job creation in shipbuilding, port services, and vessel manning, and boosts coastal passenger services and tourism (e.g., ferry and cruise operations).
Repeal of Outdated Laws:
Repeals Part XIV of the Merchant Shipping Act, 1958, and replaces the Coasting Vessels Act, 1838, to address outdated regulations and ensure uniformity in governing all vessel types.
Cooperative Federalism:
Ensures state and union territory participation through a multi-stakeholder committee for route planning, infrastructure, and policy, promoting inclusive maritime development.
Targets increasing coastal cargo traffic to 230 million tonnes by 2030 (from 162 million tonnes in 2023-24, a 119% surge since 2014-15).
These provisions aim to unlock India’s 7,500-km coastline potential, enhance maritime competitiveness, and support sustainable economic growth while aligning with global standards.
