In a landmark move to revamp India’s maritime framework, the Lok Sabha has passed the Merchant Shipping Bill, paving the way for a comprehensive overhaul of a more than six-decade-old law governing the nation’s shipping sector. Once signed into law by the President, the Bill will ease restrictions on registering ships under the Indian flag, aiming to increase the country’s shipping tonnage and reduce reliance on foreign vessels.
The legislation seeks to modernize ownership norms, enabling Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), joint ventures, and corporates to own vessels under the Indian flag. It also facilitates the registration of ships acquired through the bareboat charter cum demise (BBCD) route even before the final payment is made — a significant shift from current rules.
Union Minister of Ports, Shipping and Waterways Sarbananda Sonowal said the reforms will “encourage investors, including smaller investors, to make investments in the shipping sector, resulting in increased Indian tonnage.”
The Bill incorporates several ease-of-doing-business measures, including electronic registration, recognition of e-agreements, e-records, e-certificates, and an electronic inspection database. This is aimed at streamlining processes, enhancing port state control, and creating a coordinated inspection mechanism.
India’s share in global ship ownership currently stands at just 1.4% of global tonnage, despite handling around 11% of global EXIM cargo. Heavy dependence on foreign fleets has cost the country $637 billion in freight charges between 2008 and 2021, according to government data.
The Ministry has cautioned that over-reliance on foreign carriers poses strategic risks during geopolitical tensions, threatening food and energy security. The Bill, officials say, will help build a resilient national fleet, mitigate supply chain disruptions, and align with the Maritime Amrit Kaal 2047 Vision, which estimates ₹55 lakh crore in investments to expand India’s tonnage.
With 95% of trade by volume and 70% by value moving via sea routes, the government sees the Bill as vital for making Indian shipping Atmanirbhar and boosting the nation’s march toward becoming a $5 trillion economy.
