Modernizing India’s Maritime Economy: 2 Bills Tabled in Parliament

Posted by Written by Archana Rao Reading Time: 3 minutes

The Merchant Shipping Bill, 2024 and Coastal Shipping Bill, 2024, proposed during the winter session of Parliament, aim to secure India’s global maritime competitiveness and boost domestic waterway trade by modernizing existing regulatory frameworks, eliminating certain license requirements, and reducing compliance burdens. Shipping businesses and maritime logistics players will be key beneficiaries once the bills get enacted.

Coastal Shipping Bill, 2024: Unlocking domestic maritime potential

On December 2, 2024, India’s central government introduced the Coastal Shipping Bill, 2024, in the Lok Sabha (lower house of parliament). The proposed legislation seeks to implement transformative reforms that will boost traffic at major ports, improve industry efficiency, and particularly benefit domestic shipping operators.

Once enacted, the Coastal Shipping Bill, 2024 is expected to support Indian shipping companies by reducing bureaucratic obstacles and encouraging greater participation in both coastal and international trade. Notably, it eliminates the requirement for Indian-flagged vessels to obtain trading licenses for coastal operations, simplifying regulatory processes and incentivizing domestic operators to expand their activities.

Initially approved by the Cabinet in October, the bill also focuses on aligning the regulations for international trade vessels with global standards. This alignment is designed to enhance the competitiveness of Indian ships in global maritime markets. Additionally, the legislation proposes the establishment of a National Database of Coastal Shipping, which will improve transparency and facilitate efficient information sharing within the sector.

Key objectives and features of the bill

The Coastal Shipping Bill, 2024, intends to harness the potential of India’s 7,500-kilometer coastline and 14,500 kilometers of navigable waterways to boost domestic trade and connectivity. This bill will replace the outdated Coasting Vessels Act of 1838.

Among the bill’s crucial features is the integration of coastal shipping with inland waterways, creating a seamless multimodal transport network. This connectivity will increase the efficiency of cargo movement, reducing costs and optimizing the logistics chain.

To stimulate coastal trade, the bill introduces financial and operational incentives for vessel operators, encouraging private sector participation and increasing trade volumes. It also emphasizes indigenous shipbuilding by promoting the use of Indian-built vessels and supporting domestic shipbuilding and repair industries, fostering self-reliance in maritime infrastructure.

In addition to freight, the bill envisions growth in coastal passenger services and tourism through the expansion of ferry and cruise operations. This includes efforts to boost tourism-centric initiatives, such as cruise services, which contribute to economic diversification.

Furthermore, sustainability and safety are prioritized through updated safety measures for vessels, ports, and crews, alongside incentives for adopting green technologies to minimize carbon emissions.

Merchant Shipping Bill, 2024

The Merchant Shipping Bill, 2024, aims to modernize India’s maritime laws by replacing the Merchant Shipping Act of 1958. This update aligns India with international standards and addresses emerging challenges. The bill introduces a streamlined and cohesive structure by consolidating provisions from the previous act, eliminating redundant procedures, and reducing bureaucratic hurdles.

Key features

The Merchant Shipping Bill, 2024, enhances ease of doing business with streamlined ship registration processes, including remote registration for Indian-flagged vessels, registration of chartered vessels, and temporary registration for ships meant for recycling.

It prioritizes seafarer welfare by strengthening repatriation provisions for abandoned seafarers and aligning compensation norms with the International Labor Organization’s Maritime Labor Convention, 2006.

Maritime safety and incident management are reinforced through a statutory framework for emergency responses and stricter safety protocols for ships, passengers, and crew.

The Merchant Shipping bill also emphasizes environmental sustainability by mandating stricter controls on maritime emissions and pollution and encouraging green technologies.

Additionally, it fosters digital transformation in registration, compliance, and certification processes, enhancing transparency and efficiency across the maritime sector.

Strategic implications for India’s maritime sector

Should the bills get enacted, replacing outdated legislation, it could result in enhanced efficiency in maritime logistics that will lower transportation costs, improve supply chain reliability, and spur investment opportunities. Shifting cargo from congested road and rail networks to coastal shipping will also address environmental concerns, promoting sustainability and supporting India’s climate goals.

At a regional level, the maritime reforms will contribute to the growth of India’s “blue economy” by invigorating economic activity in coastal areas. Strengthened coastal and inland waterway networks will not only enhance domestic connectivity but also ensure resilience in trade operations, reinforcing India’s strategic development goals.

Conclusion

The Merchant Shipping Bill, 2024, and Coastal Shipping Bill, 2024, mark a leap forward in reforming India’s maritime landscape. By addressing gaps in existing legal standards and leveraging domestic potential, these bills aim to create a sustainable, efficient, and competitive maritime sector. Together, these bills can transform India into a global maritime powerhouse while fostering economic growth and upholding climate goals.

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