India’s Ministry of Ports, Shipping and Waterways (MoPSW) is considering removing licensing norms in coastal transport, while allowing easier but selective access to the country’s inland waterways. The Coastal Shipping Bill 2024, likely to be tabled in the upcoming winter session of Parliament, will remove the requirement of a general trading license for Indian-flagged vessels that are engaged in coastal trade. This will in turn promote Indian flagged tonnage.

The Coastal Shipping Bill will repeal and replace parts of the Merchant Shipping Act 1958. The new legislation will help improve the cabotage modal share from current levels of 6.4 percent to 7.5 percent by 2030 and ultimately to 12 percent by 2047.

Compared to India, the share of cabotage in Japan and the EU is five to six times higher, and the same is about seven times higher in China.

The Coastal Transport Bill 2024 has already received Cabinet approval.

This bill will be the second major legislation related to maritime trade that India plans to revise in the upcoming winter session. The Merchant Shipping Bill is the other major piece of legislation that will undergo a complete overhaul.

Coordination with inland waterways

Incidentally, the proposed bill helps in improving coordination of cabotage vessels and vessels with India’s inland waterways. Such activities – access of coastal vessels to inland waterways – required authorization from DG Maritime Transport and various other authorizations, which will now be somewhat relaxed.

“The bill paves the way for accelerated business facilitation by removing the requirement of a general trade license for Indian-flagged vessels engaged in coastal trade,” an official in the know said. sector of activity.

The proposed legislation will pave the way for the integration of coastal shipping and inland waterways, as envisaged in Sagarmala.

A comprehensive plan to integrate and develop a cabotage database is also underway. This database – which will include information on licenses and authorizations – will help facilitate and accelerate the processes of awarding separate budget allocations in the future; and supporting the promotion of the coastal shipping sector or introducing other policy interventions.

“It will also increase the visibility of growth and investment potential in coastal transport and attract investments,” said a second official.

Positive for sailors

The bill allows the government to set conditions for the manning of foreign ships, such as requiring a minimum number of Indian seafarers. The bill proposes provisions relating to the employment of Indian seafarers. This includes conditions under which Indian-built vessels or a foreign vessel engaged in coastal trade but having a high percentage of Indian seafarers could see operating standards relaxed.

Indian shipbuilding will get a boost from this legislation, which MoPSE officials say will favor Indian-built vessels for cabotage and commerce.