The Lok Sabha on Thursday passed the Coastal Shipping Bill, 2024, marking a significant step toward revolutionizing India’s maritime sector. The bill aims to provide a dedicated legal framework for coastal trade, promoting a more economical, reliable, and sustainable mode of transportation. By facilitating coastal shipping, the legislation seeks to ease the congestion on India’s overloaded road and rail networks.
Union Minister of Ports, Shipping, and Waterways, Sarbananda Sonowal, emphasized the bill’s strategic importance, stating, “The Bill seeks to unlock the full potential of India’s vast and strategic coastline, providing a dedicated legal framework for coastal trade.”
The Coastal Shipping Bill, 2024 seeks to streamline and modernize India’s coastal trade while aligning with the National Logistics Policy under Prime Minister Narendra Modi’s vision. The bill introduces future-ready provisions, aiming to integrate coastal trade into the broader logistics framework and enhance the competitiveness of India’s maritime sector.
The proposed legislation addresses gaps in earlier laws such as the Merchant Shipping Act, 1958. It includes key provisions for licensing and regulating foreign vessels in Indian coastal trade, ensuring compliance with updated and modernized regulations. A National Coastal and Inland Shipping Strategic Plan will be formulated, alongside the creation of a National Database for Coastal Shipping.
Sarbananda Sonowal, explaining the bill’s broader implications, remarked, “The overarching goal of the Bill is to develop a coastal fleet owned and operated by Indian entities. This will reduce our dependence on foreign vessels and significantly lower logistics costs, promote green transport, and create thousands of jobs in shipbuilding, port services, and vessel manning.”
Coastal shipping is expected to be a key player in reducing logistics costs and promoting sustainable transportation. The bill introduces provisions that will ease the process for Indian ships to engage in coastal trade. Among the provisions is the removal of the general trading license requirement for Indian ships, which will reduce compliance burdens and improve the ease of doing business.
Foreign vessels will now be able to engage in coastal trade only under specific licenses issued by the Director General of Shipping. This regulation supports Indian shipbuilding and employment for seafarers, aligning with the government’s “Make in India” initiative. Furthermore, the bill mandates the formulation of a National Coastal and Inland Shipping Strategic Plan, ensuring that the sector remains competitive and aligned with India’s long-term growth objectives.
The Coastal Shipping Bill, 2024 modernizes and streamlines coastal trade regulations. As Union Minister Sarbananda Sonowal highlighted, “The new Coastal Shipping Bill modernizes and streamlines coastal trade regulations, addressing gaps in the Merchant Shipping Act, 1958. Unlike its predecessor, which focused solely on vessel licensing, this Bill provides a holistic framework aligned with global cabotage practices.”
Additionally, the bill introduces several strategic measures, including prioritized berthing, green clearance channels, and the reduction of GST on bunker fuel. Coastal cargo traffic has surged 119% in the past decade, from 74 million tonnes in 2014-15 to 162 million tonnes in 2023-24. The bill sets a target of 230 million tonnes by 2030, further underlining the need for reforms in India’s maritime sector.
A key provision of the Coastal Shipping Bill is its emphasis on integrating coastal shipping with inland waterways. Sonowal stated, “The integration of coastal and inland waterways will promote regional development of riverine and coastal areas alike. This Bill will also provide long-term growth for coastal and inland waterways transport in states such as Odisha, Karnataka, and Goa.”
By promoting collaborative planning, the bill ensures that coastal shipping growth is inclusive and participative. The involvement of States and Union Territories is guaranteed in the development of strategies and routes, fostering cooperative federalism and collective planning.
The introduction of a National Database for Coastal Shipping aims to enhance transparency, coordination, and data-driven decision-making. Additionally, the bill expands the category of entities allowed to charter foreign vessels, including Indian citizens, NRIs, OCIs, and LLPs. This ensures that a wider range of stakeholders can participate in India’s growing coastal shipping sector.
Addressing concerns from opposition parties, Sarbananda Sonowal asserted that the bill is grounded in cooperative federalism. “The Coastal Shipping Bill, 2024 upholds cooperative federalism by ensuring the active participation of States and Union Territories,” he stated. Under Clause 8(3), a committee comprising representatives from major ports, State Maritime Boards, and experts will draft the National Coastal and Inland Shipping Strategic Plan. This provision guarantees States a direct role in shaping the country’s coastal shipping strategy.
The integration of coastal shipping with inland waterways offers new possibilities for regional development and economic growth, particularly in riverine and coastal states. By recognizing the role of States in this process, the bill ensures that the maritime sector grows in a collaborative and inclusive manner, in line with India’s broader development goals.
