Parliament Enacts Coastal Shipping Act, 2025 to Regulate Maritime Trade and Boost Domestic Fleet

The Parliament of India enacted The Coastal Shipping Act, 2025, which received the President's assent on August 9, 2025, and was subsequently published for general information. This Act, numbered 20 of 2025, is a comprehensive legislative instrument designed to consolidate and amend the existing legal framework governing coastal shipping in India. The Central Government will bring the provisions of this Act into force on such date or dates as it may appoint by notification in the Official Gazette. The legislation primarily focuses on the regulation of "coasting trade" (the carriage of goods or passengers by sea between Indian ports or performing services within coastal waters, excluding fishing) and aims to encourage greater domestic participation in this vital sector. A key provision of the Act is the prohibition on any vessel, other than an "Indian vessel" (a vessel registered in India under the Merchant Shipping Act, 1958), from engaging in coasting trade in Indian coastal waters without a specific licence granted by the Director-General of Shipping. The Director-General is mandated to consider various factors before issuing such a licence, including the citizenship of the crew, vessel build requirements, availability of vessels on the route, safety and national security concerns, and the cost efficiency of transport. All vessels, including Indian vessels, engaged in coasting trade are now required to report specific information to the Director-General, such as ports of call, goods or passengers carried, and offshore operational areas. Furthermore, port clearance for non-Indian vessels engaging in coasting trade will only be granted upon production of a valid licence. The Act also establishes a framework for a National Coastal and Inland Shipping Strategic Plan, to be published by the Central Government within two years of the Act's commencement and updated biennially, and mandates the Director-General to maintain a public National Database of Coastal Shipping containing details of licences, routes, and reported information. Separate provisions govern the licensing of chartered vessels, other than Indian vessels, for international voyages, requiring a licence from the Director-General for vessels chartered by Indian citizens or entities proceeding to or from Indian ports. Contraventions of the Act, such as engaging in coasting trade without a licence or providing false information, attract significant penalties, including imprisonment, fines, and vessel detention.

The legislative intent behind The Coastal Shipping Act, 2025, is to foster a robust and self-reliant maritime sector, ensuring that India possesses a strong coastal fleet owned and operated by its citizens to meet both national security and commercial requirements. The legislation provided: "An Act to consolidate and amend the law relating to regulation of coastal shipping, promote coasting trade and encourage domestic participation therein, to ensure that India is equipped with a coastal fleet, owned and operated by the citizens of India for its national security and commercial needs, and for matters connected therewith or incidental thereto." This addresses previous statutory gaps and limitations by creating a dedicated and comprehensive legal framework for coastal shipping, moving beyond the fragmented approach under earlier enactments. The Act aims to streamline operations, enhance safety, and promote economic efficiency in maritime transport, particularly by integrating coastal shipping with inland waterway routes. It seeks to achieve this by establishing clear regulatory mechanisms, such as mandatory licensing for non-Indian vessels in coasting trade and for chartered vessels undertaking international voyages. The Act also introduces a strategic planning mechanism through the National Coastal and Inland Shipping Strategic Plan, which will assess routes, identify operational improvements, and forecast traffic, thereby guiding the sector's development. The establishment of a National Database of Coastal Shipping is intended to bring transparency and facilitate informed decision-making. The Act repeals Part XIV of the Merchant Shipping Act, 1958, except for section 411A, and includes savings clauses to ensure continuity of rules, licences, and proceedings initiated under the repealed provisions. Enforcement mechanisms include powers for the Director-General to suspend or revoke licences, issue directions in public interest or for national security, and detain vessels, alongside a structured system of penalties and appeals for non-compliance. The Central Government retains powers to issue policy directions and grant exemptions under specific circumstances.

Keywords: Coastal Shipping Act, 2025, Indian maritime law, coasting trade, Director-General of Shipping, vessel licensing, national security, domestic participation, Merchant Shipping Act, National Coastal and Inland Shipping Strategic Plan, maritime regulation

Geo Tags: India District: Not Applicable