India’s New Shipping Laws

The existing legal framework for India’s shipping sector, anchored in the Merchant Shipping Act, 1958, and the Coasting Vessels Act, 1838, is ill-suited for contemporary maritime needs. These laws fail to address critical issues such as modern vessel registration, offshore operations, maritime training, and environmental challenges. Furthermore, they are out of step with international conventions like the Maritime Labour Convention (MLC), MARPOL, and the Wreck Removal Convention, which are essential for fostering global integration.

India’s shipping industry, representing only 1.2% of global shipping capacity, is hampered by these outdated regulations. The country owns just 1,526 vessels, with a gross tonnage of 13 million, significantly lagging behind maritime giants like China, South Korea, and Japan. Compounding this is the minimal presence of Indian-built ships, which account for just 0.07% of the global shipbuilding market. This underperformance not only affects economic growth but also raises concerns about national security and environmental sustainability.

Key Features of the Legislative Overhaul

Merchant Shipping Bill, 2024

The Merchant Shipping Bill replaces the 1958 Act with a streamlined and cohesive legal framework. It modernizes vessel registration by allowing ownership by NRIs, OCIs, LLPs, and other foreign entities with majority Indian ownership. This provision lowers barriers to entry and promotes investments in India’s shipping sector.

Seafarer welfare is a cornerstone of the bill. For the first time, welfare measures are extended to Indian seafarers on foreign-flagged ships. The bill also aligns compensation norms with the MLC, 2006, ensuring fair treatment of maritime workers.

A statutory framework for maritime emergency response strengthens safety protocols for vessels, passengers, and crew. Additionally, the bill mandates stricter controls on maritime pollution and encourages the adoption of green technologies, reflecting India’s commitment to environmental sustainability.

Coastal Shipping Bill, 2024

The Coastal Shipping Bill aims to revitalize India’s domestic shipping sector by replacing the Coasting Vessels Act of 1838. It eliminates the need for Indian-flagged vessels to obtain trading licenses, simplifying regulatory processes and reducing bureaucratic hurdles.

The bill integrates coastal shipping with India’s extensive network of 14,500 kilometers of navigable waterways, creating a seamless multimodal transport system. This is expected to reduce logistics costs, optimize supply chains, and promote coastal tourism and passenger services, including ferry and cruise operations.

To enhance safety, the bill introduces licensing requirements for non-propelled vessels, such as mobile offshore drilling units and accommodation barges. This move addresses regulatory gaps that previously left such vessels outside oversight, a vulnerability exposed by the tragic sinking of an accommodation barge during Cyclone Tauktae in 2021.

Strategic Implications

Economic Growth

The new shipping laws are poised to attract investments in shipbuilding, logistics, and port infrastructure. By easing regulatory burdens, they aim to encourage domestic operators to expand their fleet and participate in coastal and international trade. The reforms are also expected to shift cargo from congested road and rail networks to maritime routes, reducing transportation costs and boosting economic efficiency.

Environmental Sustainability

Both bills prioritize sustainability, mandating measures to combat marine pollution and incentivizing the adoption of green technologies. This aligns with India’s climate goals and positions the country as a leader in sustainable maritime practices.

Global Competitiveness

By aligning with international standards, the Merchant Shipping Bill enhances India’s credibility and competitiveness in global trade. It also ensures compliance with conventions like MARPOL and the Bunker Convention, essential for integrating with global maritime systems.

Enhanced Safety

The inclusion of licensing and safety measures for non-propelled vessels is a significant step forward. These provisions ensure that all vessels operating in Indian waters meet uniform safety standards, reducing the risk of accidents and protecting lives.

Challenges and Recommendations

While the legislative reforms are ambitious, their success depends on effective implementation. Infrastructure at ports must be upgraded to handle increased traffic, and support mechanisms should be introduced for domestic operators to adopt new technologies. Financial incentives, such as subsidies for shipbuilding and retrofitting, could further stimulate growth.

Collaboration between the government, private players, and international stakeholders is crucial. This includes fostering partnerships to share expertise and resources, particularly in shipbuilding and logistics.

The Merchant Shipping Bill, 2024, and the Coastal Shipping Bill, 2024, represent a transformative shift in India’s maritime strategy. By addressing historical inefficiencies and leveraging India’s geographical advantages, these reforms aim to position the country as a global maritime powerhouse. They promise not only economic growth but also safer, more sustainable, and more competitive maritime operations. With effective implementation and robust stakeholder engagement, India’s maritime makeover could herald a new era of prosperity and innovation.