The Coastal Shipping Bill, 2024 has been passed by the Lok Sabha recently.

Key Highlights of the Bill

• Aim: To create a legal framework for coastal trade to provide an economical, reliable and sustainable mode of transportation in line with the government’s overall transport vision ie. the National Logistics Policy. 
• Indian Coastal Waters: It is defined as the territorial waters of India extending up to 12 nautical miles from the coast (about 22 km) along with adjoining maritime zones extending up to 200 nautical miles (about 370 km).
• Need: 
  • Legal Framework: The Bill was brought to consolidate the legal framework for coastal shipping regulation in India and promote coasting trade and encourage domestic participation therein.
  • Atmanirbhar Bharat: To also ensure that India is equipped with a coastal fleet, owned and operated by the citizens of India for its national security and commercial needs
  • Increasing Coastal Traffic: Coastal cargo traffic has surged 119% in the last 10 years  from 74 million tonnes in 2014-15 to 162 million tonnes in 2023-24, with a target of 230 million tonnes by 2030 necessitating a comprehensive legal structure.
• Key Provisions of the Bill:
  • Regulation: The Bill seeks to regulate all types of  vessels including ships, boats, sailing vessels, and mobile offshore drilling units ( self-propelled or not)  engaged in trade within Indian coastal waters.  
  • Services Included Under Coasting Trade:  The Bill includes provision of services like exploration, research, and any other commercial activity, except fishing under coasting trade.
    • Coasting trade under the act refers to the carriage of goods and passengers from one place or port in India to another. 
  • General Trading License: 
    • Clause 3 of the bill removes the general trading license requirement for Indian ships in an attempt to reduce compliance burdens, and enhance the ease of doing business.
    • Clause 4 of the bill allows foreign vessels to engage in coastal trade only under a license issued by the Director General of Shipping
      • The category of charterers allowed to hire foreign vessels has been expanded and now includes  Indian citizens, NRIs, OCIs, and LLPs
    • Revocation of Licences: The Director General is empowered to modify, suspend or revoke licences on grounds that includes,
      • Violation of terms of licence or an existing law or failure to comply with directions of the Director General.
  • National Coastal and Inland Shipping Strategic Plan: The Bill in Clause 8 mandates formulation of the National Coastal and Inland Shipping Strategic Plan biennially  aimed to improve route planning, forecast traffic, and integrate coastal shipping with inland waterways.
  • National Database of Coastal Shipping: It is established to enhance transparency, coordination, and data-driven decision-making. 
  • Authority: The Director General of Shipping is authorized to seek information, issue directions, and enforce compliance
  • The Central Government is empowered to provide exemptions and regulatory oversight, ensuring streamlined and efficient coastal shipping operations in India.
• Cooperative Federalism: The Bill provides active representation for States and Union Territories with a Committee constituted for the National Coastal and Inland Shipping Strategic Plan under Clause 8(3) of the bill.
  • Chairperson: Director-General of Shipping
  • Ex Officio Member: Chairman of the Inland Waterways Authority of India 
  • Members: 1 representative each of the Board of Major Port Authority; Representative of the National Security Council Secretariat; Representative of each State Maritime Board; 2 representatives to represent ship owners, seafarers and such other persons having expertise in the field of coastal trade.
• Advantages:
  • Inclusive Growth: The Bill foster inclusive growth by  integrating coastal shipping with inland waterways and upholding the principle of cooperative federalism guaranteeing States a direct role in shaping strategy, routes, and regulations.
  • Promote Regional Development: The integration of coastal and inland waterways will promote regional development of riverine and coastal and inland waterways transport in States such as Odisha, Karnataka and Goa among others
  • Towards Atmanirbhar Bharat: The Bill ensures legal clarity, regulatory stability, and investment-friendly policies, strengthening India’s maritime security and advancing the vision of Atmanirbhar Bharat
  • Self Reliance in Fleet Operation: It is to develop a coastal fleet owned and operated by Indian entities leading to reduced dependence on foreign vessels for critical areas
  • Addresses Regulatory Gaps: The Bill modernises and streamlines coastal trade regulations, addressing gaps in the Merchant Shipping Act, 1958 and provides a forward-looking, holistic framework aligned with global cabotage practices.
  • Decongest Overburdened Networks: This Bill aims to boost coastal trade along with propelling inland waterways and riverine economies while offering a low-cost, reliable, and sustainable alternative to overloaded road and rail networks.
  • Reforms: The bill builds on key reforms, including prioritised berthing, green clearance channels, and GST reduction on bunker fuel.

DOWNLOAD PDF