• Union Ports, Shipping and Waterways minister Sarbananda Sonowal introduced the Coastal Shipping Bill, 2024 in Lok Sabha on December 3.

• The Bill seeks to promote coastal trade and encourage the participation of Indian-flagged vessels owned and operated by Indian citizens for national security and commercial needs.

• The Bill seeks prohibition of trade in the coastal water without licence by vessels other than Indian vessels and permitting Inland vessels to engage in coastal trading subject to certain conditions.

For uniform regulation of coastal maritime sector 

• Coastal shipping in India holds great potential owing to its vast coastline of around 7,500 kilometers and proximity to important global shipping routes. 

• It has been recognised that maritime transportation, particularly coastal shipping is cheaper compared to other modes of transportation. 

• There is a need to improve transport connectivity and supporting infrastructure in the coastal maritime transport sector. 

• The cost of transportation and logistics directly impacts the production cost and there has been a concerted policy effort to improve efficiencies in this regard.

• The regulation of the coastal maritime sector in India lacks uniformity. Non-mechanised vessels engaged in coastwise trade are governed by the Coasting Vessels Act, 1838 which only provides for registration of such vessels. 

• The mechanised vessels on the other hand fall under the purview of the Merchant Shipping Act, 1958.

• The measures pertaining to regulation, safety, security and pollution prevention also need to be addressed. 

• The present regulatory framework under Part XIV of the Merchant Shipping Act, 1958, requires Indian ship as well as ships chartered by Indian citizens and foreign vessels to obtain licence before taking ship to sea, including for coasting trade. 

• However, the licensing requirement for all vessels including Indian vessels and exclusion of foreign flag non-propelled vessels from the coasting trade has proven to be a hindrance to competition and efficiency of the sector. 

• It is felt necessary to bring foreign flag non-propelled mobile offshore drilling units, accommodation barges, etc also within the purview of the regulatory requirements.

• In view of the challenges arising in the regulation of coasting trade, it is considered necessary to strengthen the regulation of vessels engaged in coasting trade by adopting the best global practices, to meet the present and future requirements of the maritime coastal shipping sector.

Key provisions of the Bill:

• Include the term “service” in the definition of “coasting trade” so as to bring offshore vessels which generally provide services without engaging in transportation of goods and passengers, within the ambit of the Bill.

• Prohibition of coasting trade in the coastal water without licence by vessels other than Indian vessels and permitting Inland vessels to engage in coastal trading subject to certain conditions.

• Empowering the Director-General to issue licence after taking into consideration certain factors including citizenship of the crew and building requirements of the vessel so as to create more jobs for Indian seafarers and to promote ship building in India.

• Requirement of licence by vessels chartered by Indian entities for purposes other than coasting trade.

• Creation of a National Database of Coastal Shipping so as to ensure transparency of procedure and aid in information sharing.

• Preparation of a National Coastal and Inland Shipping Strategic Plan for development, growth and promotion of coastal shipping.

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