Recently, the Rajya Sabha passed the Indian Ports Bill, 2025, replacing the Indian Ports Act, 1908. It comes alongside the newly enacted Coastal Shipping Act, 2025, the Carriage of Goods by Sea Bill, 2025, and the Merchant Shipping Act, 2025

• Together, they aim to modernise India’s maritime sector, streamline regulation, and align with global practices.

Summary of New Maritime Laws

Need for the Reform

• Outdated colonial-era laws: The 1908 Ports Act and 1958 Merchant Shipping Act had been overtaken by global conventions, offshore activities, and modern finance.
• Modernisation imperative: Coherent, updated frameworks are critical to attract investment and enhance global trade competitiveness.
• Ease of doing business: The new package promises facilitative laws to reduce fragmentation, promote sustainable port development, and bring predictability.
• Global alignment: Liability, safety, ownership, and insurance provisions now align more closely with international conventions.
• Comprehensive approach: By addressing ports, shipping, coastal trade, and carriage of goods, the reforms create an integrated governance package.
  

Key Concerns in India’s Maritime Sector

1. Federal Concerns – Centralisation vs Autonomy

• Centralisation of power: The Maritime State Development Council, chaired by the Union Minister, can issue directions to States..
• From cooperation to subordination: Instead of cooperative federalism few contend that the new Ports Act is an example of federal subordination, designed to ensure that States align their port development with central plans, such as Sagarmala and PM Gati Shakti regardless of their own priorities.
• Loss of autonomy: State maritime boards cannot amend frameworks without Centre’s approval which shrinks fiscal and regulatory independence.
  

2. Regulatory and Judicial Concerns

• Vague and discretionary powers granted under the Ports Act could overburden smaller operators.
• Dispute resolution flaw:
• • Clause 17 of Ports Act: It bars civil courts from hearing port disputes.
  • Disputes go to internal committees created by port authorities themselves.
• Absence of independent judicial review risks deterring investment and undermining trust.
  

3. Ownership Loopholes under the Merchant Shipping Act, 2025

• Diluted safeguards: Earlier law mandated 100% Indian ownership of Indian-flagged vessels. New law allows partial foreign ownership, with thresholds left to executive notification.
• Bareboat Charter-Cum-Demise (BBCD): BBCD registration lets Indian operators lease foreign ships with a path to eventual ownership 
  • BBCD could test India’s regulatory capacity to ensure that transfers actually occur. Without clear, enforceable rules, foreign lessors may retain effective control indefinitely
• Bureaucratic burden: Mandatory registration of all vessels, regardless of size, may overburden small operators.
• Risk of flag-of-convenience: Excessive executive discretion could allow foreign dominance of Indian-flagged ships.
  

4. Burdening Smaller Operators under the Coastal Shipping Act, 2025

• Cabotage protection diluted: While reserving coastal trade for Indian-flagged ships, the DG Shipping can permit foreign vessels on vague grounds like “national security” or “strategic plans.”
• Compliance load: Mandatory voyage and cargo reporting without clarity on data use, disproportionately affecting fishing communities and small operators.
• Central planning dominance: The National Coastal and Inland Shipping Strategic Plan could override local priorities.

5. Process Concerns: Passage of sweeping reforms without deep parliamentary debate or standing committee scrutiny raises questions about democratic legitimacy and public consultation.

What Measures can India Adopt to Enhance Efficiency of the Maritime Sector?

• Legislate clear thresholds: Ownership and licensing rules should be clearly defined in law, not left to executive discretion.
• Restore judicial independence: Ensure access to impartial courts for dispute resolution to build investor confidence.
• Protect smaller operators: Simplify registration and compliance frameworks proportionate to vessel size and operator capacity.
• Strengthen federal balance: States must have meaningful say in port planning and policy, avoiding one-size-fits-all central directives.
• Ensure transparency in licensing: Objective, well-defined criteria for admitting foreign vessels into cabotage trade.
• Enforce BBCD rules strictly: Guarantee that leased ships eventually transfer ownership to Indian operators.

Way Forward

• Modernisation with safeguards: Reforms are necessary, but centralisation and vague provisions undermine federalism and fair competition.
• Balance ease of business with inclusivity: Large operators may benefit, but small players and States must not be marginalised.
• Strengthen consultation mechanisms: Wider debate and committee scrutiny can refine reforms and build political consensus.
• Long-term vision: India must modernise its maritime sector without compromising sovereignty, judicial independence, or the federal compact.

Conclusion

India’s maritime overhaul is a step forward, but without course correction, it risks delivering ease of doing business for the few while weakening federal balance and maritime security in the long run.

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