Introduction (Context)
India’s maritime sector has long been governed by colonial-era and fragmented laws. Recently, the Rajya Sabha has passed the Indian Ports Bill, 2025, marking a major overhaul in India’s maritime legislative framework.
Along with the Coastal Shipping Act, 2025, the Carriage of Goods by Sea Bill, 2025, and the Merchant Shipping Act, 2025, this legislative package seeks to replace colonial-era laws (notably the Act of 1908) and align India’s maritime sector with global best practices.
However, concerns have emerged regarding federalism, ownership safeguards, regulatory overreach, and impacts on smaller players.
Indian Ports Bill, 2025
- The act will modernise India’s port governance, enhance trade efficiency, and solidify India’s position as a global maritime leader.
- The legislation also emphasises sustainability, incorporating green initiatives, pollution control, and disaster management protocols for sustainable port development.
- It aims to simplify port procedures & digitalise operations to enhance ease of doing business (EODB).
- For ports themselves, the bill provides greater autonomy with accountability, allowing ports to set competitive tariffs within a transparent framework.
Criticism
- The Ports Act, 2025 has been criticised for centralising powers in the hands of the Union government, thereby weakening the role of States and diluting safeguards meant to protect Indian sovereignty.
- A key feature of the Act is the creation of the Maritime State Development Council (MSDC), chaired by the Union Minister of Ports. This body acts as a centralised policy-making authority, empowered to direct States to follow central guidelines.
- Critics argue that this design does not reflect cooperative federalism but instead shows federal subordination, where States are compelled to align their port development policies with central schemes such as Sagarmala (port-led development programme) and PM Gati Shakti (national master plan for integrated infrastructure).
- Under this framework, State maritime boards cannot revise or adapt their port-related policies without central approval, thereby stripping coastal States of fiscal autonomy and administrative flexibility.
- Further experts warn that the Act introduces vague and discretionary regulatory powers, meaning authorities can interpret rules broadly, potentially creating compliance burdens that are difficult for smaller port operators to manage.
- Clause 17 of the Act bars civil courts from hearing port-related disputes, and instead channels such disputes to internal resolution committees set up by the same authorities whose actions are being challenged.
Merchant Shipping Act, 2025
- The law seeks to modernise registration systems, ownership norms, safety standards, environmental obligations, and liability frameworks in the shipping sector.
- It expands the definition of vessels to include offshore drilling units and non-displacement crafts (vessels that move above water like hovercrafts, not by displacing water like traditional ships).
- It strengthens oversight of maritime training institutes, ensuring better quality control in seafarer education and skill development.
- It aligns India’s liability and insurance rules with global conventions, making them consistent with international standards to improve investor and operator confidence.
Criticism
- Under the older Merchant Shipping Act, 1958, Indian-flagged vessels had to be 100% Indian-owned. The new law allows “partial” Indian ownership, including by Overseas Citizens of India (OCI) and foreign entities. The exact threshold is left to government notification, raising fears of excessive executive discretion.
- This dilution of ownership requirements creates a risk of India turning into a flag-of-convenience jurisdiction (where foreign owners control ships under India’s flag, often to exploit regulatory leniency).
- The Act introduces Bareboat Charter-Cum-Demise (BBCD) registration, a system where Indian operators can lease foreign vessels with an option of eventual ownership. While globally accepted, without strict enforcement, lessors (foreign owners) may retain effective control indefinitely, weakening India’s maritime autonomy.
- The law mandates registration of all vessels, irrespective of size or propulsion. This may impose heavy bureaucratic and financial burdens on small coastal and fishing operators.
- By allowing the executive unchecked power to dilute ownership norms “whenever convenient,” the Act hands over a blank cheque to the government, raising concerns of arbitrariness and loss of long-term sovereignty.
Coastal Shipping Act, 2025
- It introduces a simplified licensing system for coastal shipping and lays down the framework for regulating foreign vessels engaged in coasting trade.
- The Bill mandates the formulation of a National Coastal and Inland Shipping Strategic Plan to guide future infrastructure development and policy direction.
- The legislation also provides for the creation of a National Database for Coastal Shipping, enabling real-time access to authentic and regularly updated data, promoting transparency and confidence.
Criticism
- The Act’s primary objective is to protect cabotage (the rule that only Indian-flagged ships can carry goods along India’s coast).
- While this appears to strengthen domestic trade, the Act gives the Director General of Shipping (DG Shipping) wide discretion to permit foreign vessels in domestic routes.
- Such permissions may be granted on vague grounds like “national security” or “alignment with strategic plans.” These open-ended clauses invite subjective interpretation and selective application.
- Compliance requirements such as mandatory reporting of voyage and cargo details create disproportionate burdens for small operators, especially in the fishing sector, who may lack the capacity to handle complex paperwork and digital tracking systems.
- The Act also mandates a National Coastal and Inland Shipping Strategic Plan to be centrally framed, which States must follow, undermining the principle of decentralised planning for local needs.
Way Forward
- Maritime State Development Council should be redesigned to ensure equal say for States.
- Define ownership thresholds and licensing conditions clearly in legislation. Avoid leaving critical decisions to executive discretion.
- Establish independent maritime tribunals or empower High Courts for maritime disputes.
- Introduce exemptions or simplified compliance mechanisms for fishing vessels and small-scale operators.
- Safeguard cabotage rules to protect domestic coastal shipping from unfair competition.
Conclusion
India’s maritime reforms are undoubtedly necessary to bring its laws in line with global standards and unlock the potential of its 7,500 km coastline. Yet, modernisation should not come at the cost of federal balance, fair competition, and sovereignty safeguards. A balanced approach that respects States’ autonomy, judicial independence, and protection for small operators will ensure that maritime reforms truly strengthen India’s long-term maritime security and economic growth.
Mains Practice Question
Q India’s recent maritime reforms have been hailed as a step towards modernisation, but they also raise concerns of federal imbalance and regulatory overreach. Critically examine. (250 words, 15 marks)