In a major push to strengthen India’s multimodal logistics network and promote coastal shipping, the Ministry of Ports, Shipping and Waterways (MoPSW) is set to roll out a ₹10,012 crore Coastal Cargo Promotion Scheme aimed at doubling the share of coastal shipping in the country’s freight movement from the current 6 per cent to 12 per cent by 2047, according to sources familiar with the proposal.
The ambitious scheme, announced in line with the Union Budget’s vision for enhancing coastal logistics, seeks to incentivise both vessel operators and cargo owners through a comprehensive financial support mechanism designed to shift more domestic cargo from road and rail to the sea.
Under the proposed framework, stakeholders will be eligible for incentives of up to 25 per cent of voyage costs, with assistance linked to commodity categories, sailing distance and incremental cargo movement.
The package includes a ₹7,969 crore incentive for coastal vessel operators and ₹1,992 crore for cargo owners, initially applicable for five years with a provision for extension by another five years based on performance and outcomes.
Driving Growth in Coastal Cargo
The scheme aims to stimulate additional cargo movement along India’s coastline by encouraging new Origin-Destination (OD) pairs, expanding coastal container services, promoting Roll-on/Roll-off (Ro-Ro) operations, supporting non-conventional and emerging cargo segments, and improving service reliability through performance-linked incentives.
Government estimates suggest the initiative could accelerate coastal cargo volumes from the current 193 million tonnes (MT) to approximately 588 MT over the next decade, representing a compound annual growth rate (CAGR) of 11.8 per cent.
India’s coastal cargo throughput has already demonstrated strong momentum, recording a 7.1 per cent CAGR over the past decade and 9.2 per cent CAGR during the last five years, reflecting growing industry acceptance of coastal shipping as a viable logistics option.
“The vision is to develop coastal shipping as a reliable, cost-effective, sustainable and commercially viable mode of freight movement, thereby strengthening India’s multimodal logistics ecosystem,” a source said.
Coastal Fleet and Port Infrastructure
India currently operates a coastal fleet of 1,089 vessels with a combined gross tonnage of 1.7 million tonnes. The fleet composition includes:
- Dry cargo liners – 51%
- Oil tankers – 18%
- Dry bulk carriers – 10%
- Offshore supply vessels – 8%
- Passenger-cum-cargo vessels – 7%
- Specialised offshore service vessels – 6%
The country’s 12 major ports handled 196 MT of coastal cargo in FY25 through 21 dedicated coastal berths, while several mechanisation and capacity expansion projects are underway to enhance coastal cargo handling capabilities by 2030.
Cargo Mix and Leading Ports
During FY26, Indian ports collectively handled 353.5 MT of coastal cargo, with major ports accounting for 213 MT and non-major ports contributing 140.5 MT.
Coal remained the dominant cargo, accounting for 125.9 MT (35.6%), followed by:
- Petroleum, Oil and Lubricants (POL): 72.4 MT (20.5%)
- Iron ore: 70.8 MT (20%)
- Other cargo: 59 MT (16.7%)
- Containers: 25.4 MT (7.2%)
- Fertilisers: 0.1 MT
Among major ports, Paradip Port emerged as the largest coastal cargo handler with 66 MT, followed by Visakhapatnam Port (26 MT), Mumbai Port (22 MT), Deendayal Port (22 MT), Kamarajar Port (20 MT), Cochin Port (13 MT) and V.O. Chidambaranar Port (10 MT). Together, these ports accounted for nearly 85 per cent of coastal cargo handled by major ports.
Among non-major ports, Gujarat (53 MT), Maharashtra (39 MT) and Andhra Pradesh (36 MT) collectively contributed 91 per cent of total coastal cargo volumes.
Strengthening the Coastal Shipping Ecosystem
India currently has 294 coastal vessel operators, with the top 20 operators transporting 62.2 MT, representing 71.68 per cent of the total coastal cargo carried by sea.
As part of the broader strategy, the government is also considering assigning a dedicated coastal shipping role to the proposed Bharat Container Shipping Line, particularly for coastal container services and Ro-Ro operations.
Other initiatives under consideration include leveraging the Maritime Development Fund to establish dedicated ship repair facilities for coastal vessels along the eastern coast, introducing GST-related reforms, optimising rail freight and bunker costs, strengthening last-mile rail and road connectivity to ports, integrating coastal shipping with inland waterways, and promoting green coastal shipping initiatives.
Global Perspective
While coastal shipping currently accounts for around 6 per cent of India’s freight modal share, it remains significantly below several leading maritime nations. Coastal shipping contributes 34 per cent of freight movement in Japan, 28 per cent in Italy, 24 per cent in China, and 11 per cent in the United Kingdom.
With the proposed incentive scheme and supporting policy reforms, the government aims to unlock the untapped potential of coastal shipping, reduce logistics costs, decongest highways and railways, lower carbon emissions, and strengthen India’s position as a globally competitive maritime economy. Source: ET Infra
