Union Cabinet approves Coastal Shipping Bill, 2024
NEW DELHI : ‘mygovindia‘-Union Cabinet chaired by Shri Narendra Modi approved Coastal Shipping Bill, 2024 & repeal Part XIV of Merchant Shipping Act 1958 except section 411A. It will benefit Indian ship owners, non-vessel operating common carriers,cargo owners, Indian seafarers & shipyards.
The Indian government is all set to approve a landmark decision for the shipping sector – the Coastal Shipping Bill 2024 – which is expected to be cleared in an upcoming Cabinet meeting. The Bill could pave the way for several transformative measures aimed at boosting traffic at major ports and enhancing the overall efficiency of the maritime industry, with changes particularly benefiting domestic shipping companies.
The Coastal Shipping Bill 2024 aims to modernize and streamline the shipping industry by introducing several key reforms:
1. Removal of Trading Licence Requirement: The Bill proposes to eliminate the need for Indian-flagged vessels to obtain a trading license for conducting coastal trade. This move is expected to simplify regulatory procedures and encourage more domestic shipping operators to engage in coastal shipping, thus enhancing the sector’s competitiveness.
2. Alignment with Global Standards: The Bill also seeks to align regulations governing
international trade ships with global standards. This will help Indian vessels meet international benchmarks and make them more competitive in global maritime trade.
3. Integration of Coastal and Inland Waterways: In a bid to reduce transportation costs and improve logistics efficiency, the Bill proposes to integrate coastal maritime transport with inland waterways. This move will enhance connectivity between India’s extensive network of rivers and its coastal ports, creating a more seamless and cost-effective transport chain.
4. Increased Share for Indian Vessels: Another significant focus of the Bill is to increase the market share of Indian vessels in coastal shipping. Steps are expected to be introduced to ensure that Indian-flagged ships play a more dominant role in coastal trade, boosting domestic maritime industry growth.
The proposed Coastal Shipping Bill is part of India’s broader strategy to accelerate the growth of its maritime sector. Shipping Minister Sarbananda Sonowal recently stated that India is targeting a two-fold increase in its container handling capacity over the next five years, creating an estimated 20 lakh jobs. The Bill is expected to play a crucial role in achieving this ambitious target by providing a more conducive regulatory environment for growth.
The government is also planning to establish shipbuilding and repair clusters in five state —Gujarat, Maharashtra, Kerala, Andhra Pradesh, and Odisha. These clusters will not only create new jobs but also strengthen India’s position as a global player in ship manufacturing and maintenance.
The maritime industry has witnessed rapid expansion in recent years, necessitating a dedicated framework for coastal shipping. According to the Ministry of Shipping, the sector has become an integral part of India’s transport chain, making the Coastal Shipping Bill essential to meet the growing demands of the industry. A dedicated policy for coastal shipping will help address regulatory bottlenecks, promote investment, and improve the overall efficiency of maritime transport.
India currently ranks as the 16th largest maritime nation globally, with the maritime sector contributing to 95% of the country’s trade by volume and 70% by value, according to Invest India. The country is also a global leader in ship recycling, ranking third in the world by tonnage.
With 12 major ports and 200 non-major ports, India’s shipping infrastructure is extensive, and the government’s push to modernize regulations will further strengthen its maritime capabilities. Jawaharlal Nehru Port Trust in Mumbai remains the largest port in India, while Mundra is the biggest private port, underscoring the country’s diverse and growing port ecosystem.
India’s tonnage has seen steady growth over the last decade, reflecting the increasing capacity and capabilities of Indian-flagged vessels. As of June 2024, there are 1,530 Indian-flagged vessels engaged in overseas and domestic trade, accounting for a total of 13.7 million Gross Tonnage (GT). This increase in tonnage is indicative of a shift in business preference towards Indian-flagged vessels, as they are now competing more effectively against foreign-flagged ships.
The Coastal Shipping Bill 2024 is expected to further bolster this trend by creating a more favourable environment for domestic shipping operators, reducing bureaucratic hurdles, and encouraging greater participation in both coastal and international trade.
With the expected approval of the Bill, India’s maritime sector is on the cusp of transformative growth, contributing not only to the economy but also to employment generation and infrastructure development across the nation.