Plan in works to merge coastal shipping with inland waterways

NEW DELHI: The government is readying legislative changes to integrate coastal shipping with inland waterways in the country while introducing stringent licensing norms for foreign ships, said officials.

"Permission to foreign vessels for carrying out coastal trade will be given after considering strategic domestic objectives such as citizenship of the crew, build of the vessel and current number of vessels on the route," a senior government official told ET on condition of anonymity.

This permission will be given under the Way of Rules drafted under provisions of the proposed Coastal Shipping Bill, 2024, the official said.


"The New Act indicates the kind of conditions that can be imposed by DG (director general) shipping for grant of licence to the foreign vessels. Nearly 80% of coastal cargo is ferried on foreign flagged ships in the country," said Amitabh Kumar, former director general of Shipping.

According to Kumar, the Merchant Shipping Act in its present form did not cater to most vessels used for offshore uses. "Chapter XIV of the existing Act is limited to propelled vessels. The proposed change will have a much wider scope," he said.

Under the new bill, Indian ships will not require separate licences. It will be presumed that they have got approvals when the vessel is registered, Kumar said. It is expected that these changes will enable concerted regulation of trade activities, particularly by foreign flag vessels in India's coastal waters, including in the country's exclusive economic zones. Foreign vessels will need to verify their identity, scope of work and other factors that may impact India's safety, security, environment and other coastal shipping related interests. "This will regulate them and provide impetus to the domestic coastal shipping economy," the official said, adding that a separate law for coastal shipping will also lead to easier and expedited processes for distinct budgetary allocations in the future.

The proposed legislation will seek to remove any licensing requirement for Indian vessels to participate in coastal trade.

The bill explicitly lays down a national strategic plan, which will govern licensing in the country and pave the way for integration of inland and coastal shipping. "This would lead to an increase in direct (through ownership) and indirect participation (through ancillary services) of Indian businesses in coastal shipping," the official said.