LS Passed Coastal Shipping Bill, 2024

Syllabus: GS3/Economy

Context

• The Lok Sabha has passed the Coastal Shipping Bill, 2024.

About

• The Bill regulates vessels engaged in trade within Indian coastal waters, which include territorial waters and adjoining maritime zones.
• The Bill is based on global best practices and dedicated laws of major maritime nations.
• It consolidates and amends laws related to coastal shipping, promotes coasting trade, and encourages domestic participation.

Major Highlights

• Coastal Waters: Territorial waters extend up to 12 nautical miles (about 22 km), and adjoining maritime zones extend up to 200 nautical miles (about 370 km).
• Repeal of Merchant Shipping Act: The Bill seeks to repeal Part XIV of the Merchant Shipping Act, 1958, regulating ships in coastal trade.
• Vessel Types Covered: The Bill regulates all types of vessels, including ships, boats, sailing vessels, and mobile offshore drilling units.
• Expansion of Coasting Trade Definition: The Bill expands coasting trade to include services like exploration, research, and other commercial activities (except fishing).
• Licence Requirements:
  • Vessels wholly owned by Indian citizens don’t need a licence for coasting trade.
  • Vessels not wholly owned by Indian citizens need a licence.
  • Overseas Citizens of India (OCIs) hiring vessels for operations outside India are exempt from the licence requirement.
• Licence Issuance: The Director General of Shipping, appointed by the central government, issues licences.
• Increased Penalties: The Bill raises the maximum fine for unlicensed coasting trade to Rs 15 lakh or four times the gains from the unlicensed voyage.
• Replaces imprisonment penalties with civil penalties (up to Rs 5 lakh or twice the gains from contravention).
• National Strategy Plan: The central government must prepare a National Coastal and Inland Shipping Strategic Plan within two years of the Act’s commencement.
• National Database: Introduces a National Database for Coastal Shipping to enhance transparency and coordination.
• Exemption Powers: The central government has the power to exempt certain classes of vessels from the Bill’s provisions.
• Ease of Doing Business: Removes the general trading license requirement for Indian ships and reduces compliance burdens.
• Support for Indian Shipbuilding: Encourages foreign vessels to support Indian shipbuilding and employment for seafarers.

India’s Shipping Sector

• Cargo Traffic Growth: Coastal cargo traffic surged by 119% from 2014-2024, with a target of 230 million tonnes by 2030.
• Achievements: The Ministry of Ports, Shipping, and Waterways has increased cargo handling capacity by 103% in the last decade.
• Port Ranking Improvement: India’s port ranking improved from 54th in 2014 to 38th in 2023, with nine Indian ports now in the top 100 globally.
• Future Goals: India has outlined investments of US$ 82 billion in port infrastructure projects by 2035 to bolster the maritime sector.
  • India plans to establish a new shipping company to expand its fleet by at least 1,000 ships within a decade. 

Initiatives by Government

• Sagarmala Programme: Focuses on leveraging India’s coastline and of navigable waterways.
  • Supports port infrastructure, coastal development, and connectivity.
  • Financial aid for projects like coastal berths, rail/road connectivity, fish harbours, cruise terminals.
• Maritime India Vision 2030 (MIV 2030): Aiming for India to become a top 10 shipbuilding nation by 2030 and create a world-class, efficient, and sustainable maritime ecosystem.
  • Includes 150+ initiatives across ten key maritime sectors.
• Inland Waterways Development: 26 new national waterways identified by the Inland Waterways Authority of India (IWAI).
  • Provides alternative, sustainable transport, easing road/rail congestion.
• Green Tug Transition Program (GTTP): Aims to replace fuel-based harbour tugs with eco-friendly, sustainable fuel-powered tugs.
  • Transition to be completed by 2040 across major ports.
• Sagarmanthan Dialogue: An annual maritime strategic dialogue to position India as a global center for maritime conversations.
• Maritime Development Fund: ₹25,000 crore fund for long-term financing to modernize ports and shipping infrastructure, encouraging private investment.
• Shipbuilding Financial Assistance Policy (SBFAP 2.0): Modernized to help Indian shipyards compete with global giants.

Conclusion

• The Bill seeks to unlock the full potential of India’s vast and strategic coastline, providing a dedicated legal framework for coastal trade.
• It will reduce our dependence on foreign vessels and significantly lower logistics costs, promote green transport, and create jobs in shipbuilding, port services, and vessel manning.
• The efforts will take India’s maritime sector toward a sustainable, innovative, and future-ready ecosystem, ensuring its place as a central player in the global maritime landscape.

Source: PIB