Coastal Shipping Bill, 2024

Syllabus: GS2/ Bills, GS3/ Economy

Context

• Recently, the Union Ministry of Ports, Shipping and Waterways introduced the Coastal Shipping Bill, 2024 seeking to promote coastal trade and encourage the participation of Indian-flagged vessels owned and operated by Indian citizens for national security and commercial needs.

Background

• Coastal shipping, which involves the movement of goods and passengers along the coastlines (about 7,517 kilometers) within territorial waters, plays key nodes in global supply chains and is also crucial to the growth of the economy.
• Major ports are directly under the administrative control of the Central Government while minor/intermediate ports are managed and administered by the respective maritime State Governments.
• However, the sector has been regulated by outdated laws, such as the Coasting Vessel Act of 1838 and the Merchant Shipping Act of 1958, which lack uniformity.

Significance of Coastal Shipping

• Coastal shipping is an energy-efficient and cost-effective mode of transport, particularly suited for bulk cargoes. 
• It helps alleviate the pressure on road and rail networks, reducing congestion and environmental impact. 
• Additionally, coastal shipping supports national security by providing strategic logistical support during emergencies.

Key Provisions of the Coastal Shipping Bill, 2024

• Simplified Licensing: One of the most notable changes is the removal of the requirement for a general trading license for Indian-flagged vessels engaged in coastal trade.
  • It is expected to reduce bureaucratic hurdles and encourage more Indian vessels to participate in coastal shipping.
• National Database: It proposes the creation of a National Database for coastal shipping to ensure transparency and facilitate information sharing.
• Strategic Plan: The Bill mandates the preparation of a National Coastal and Inland Shipping Strategic Plan to promote the development and growth of coastal shipping.
• National Security: The bill emphasizes the importance of national security by ensuring that coastal trade is primarily conducted by Indian-flagged vessels owned and operated by Indian citizens.
• Inland Vessels Participation: The bill permits inland vessels to engage in coastal trading under certain conditions, thereby expanding the scope of vessels that can participate in coastal trade.
• Environmental Standards: The bill includes provisions to ensure compliance with environmental standards, which is crucial for sustainable development.
• Penalties and Enforcement: It introduces penalties for non-compliance and empowers authorities like the Director-General of Shipping to enforce regulations.
• Job Creation: By focusing on Indian-flagged vessels and Indian crew, the Bill seeks to create significant employment opportunities in the maritime sector.

Implications

• The Coastal Shipping Bill, 2024, is expected to significantly impact the maritime industry by promoting the use of Indian-flagged vessels, enhancing national security, and creating jobs. 
• It also aims to modernize the regulatory framework governing coastal shipping, making it more efficient and transparent.

Challenges 

• Despite its potential, coastal shipping in India faces several challenges, including inadequate infrastructure, regulatory bottlenecks, and competition from other modes of transport. Addressing these challenges requires a concerted effort from both the government and the private sector.

Way Ahead

• Infrastructure Development: Investing in port infrastructure, including modernizing existing ports and developing new ones, is crucial for the growth of coastal shipping.
• Policy Support: Continued policy support, including incentives for shipbuilding and maintenance, can help attract more players to the sector.
• Public-Private Partnerships: Encouraging public-private partnerships can facilitate the development of necessary infrastructure and services, ensuring the sustainable growth of coastal shipping.

Source: TH