On 9-8-2025, the Ministry of Law and Justice issued the Coastal Shipping Act, 2025 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.
Key Points:
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Prohibition for Coasting Trade:
- Only Indian vessels will be allowed to engage in coastal trade except the vessels that have obtained a license by the Director- General;
- Director General can permit a vessel registered under the Inland Vessels Act, 2021 to engage in coasting trade by order in writing;
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License for Coasting Trade:
- Applications for license will be made to Director- General;
- Before granting the license, the Director- General will consider the following factors:
✓ If the applicant had previously held a license;
✓ If any provisions of the Coastal Shipping Act, 2025 have been violated by the applicant before or during the pendency of his applications;
✓ Citizenship of the crew;
✓ Build requirements of the vessel;
✓ Availability of vessels on the route;
✓ Licenses granted to vessels for the same route;
✓ Safety, national and maritime security concerns;
✓ Equipment on board the vessel including communication equipment;
✓ Cost efficiency of transport;
✓ Strategic Plan
✓ Validity of the certificates of vessel and crew;
✓ Validity of the certificate of insurance of the vessel.
- The Director General will prescribe the validity of the license, class or category of license.
- Suspension/ Revocation/ Modification of license can be done by Director- General if:
- Person violates any condition of license;
- Fails to comply with any requirement under the law;
- Fails to comply with directions issued;
- Fails to pay any fine or serve a sentence imposed.
- In case, the license ceases to be valid due to expiry of its period or revocation, the licensee can:
- Return it or cause it to be returned to the Director-General;
- Cease to engage in coasting trade.
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Vessels engaging in coastal trade will have to report to the Director General the following information:
- Port/ ports which it will visit in the course of its voyage;
- Goods or passengers carried by vessel and the ports or places where such goods or passengers will be dropped off;
- Any offshore area in which it may operate or navigate for the purposes of its voyage.
- The Central Government will formulate a National Coastal and Inland Shipping Strategic Plan within 2 years periods from the commencement of this Act, which will be updated every 2 years.
- A National Database of Coastal Shipping will be maintained by the Director General in electronic form on a web portal and will be updated every month.
- Chapter IV of the Coastal Shipping Act, 2025 comprise of licensing of Chartered Vessels other than for Coasting trade.
- Judicial Magistrate of First Class can pass any sentence provided under the Coastal Shipping Act, 2025 on any person convicted of an offence.
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Power to exempt:
- Director General, with the prior approval of the Central Government, can exempt from the provisions of the Coastal Shipping Act, 2025.
- Conditions:
✓ any vessel/ class of vessels engaged in coasting trade; or
✓ any class of vessels chartered by a citizen of India or non-resident Indian or an overseas citizen of India, or a company or a co-operative society or a limited liability partnership.
- The following can detain the vessel under the instructions of principal officer:
- Any commissioned officer of Navy or Coast Guard or Police;
- Any Port officer;
- Pilot;
- Harbour master;
- Conservator of port;
- Commissioner of Customs.
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Coastal Shipping Act, 2025 repeals:
- Part XIV of the Merchant Shipping Act, 1958 which deals with “Control of Indian Ships and Ships Engaged in Coasting Trade”;
- Exception: Section 411-A- “Powers of the Central Government to protect interests of Indian Shipping from undue foreign intervention”.
