India’s maritime geography is both an opportunity and a responsibility. With an extensive coastline of over 11,000 kilometres, nine coastal states, and four Union Territories, the country is naturally positioned to harness coastal shipping as an economic and strategic asset. Yet, for decades, India’s shipping sector remained under-utilised compared to road, rail, and inland water transport. The Coastal Shipping Act, 2025, which replaces Part XIV of the Merchant Shipping Act, 1958, marks a decisive policy shift. It provides a modern legal and regulatory framework designed to unlock India’s maritime potential by simplifying processes, encouraging investment, and strengthening security oversight. The goal is clear and ambitious: to raise coastal cargo traffic to 230 million metric tonnes by 2030, a target that could transform the nation’s logistics landscape and bring the coastline into the mainstream of economic growth.
A MODERN FRAMEWORK FOR MARITIME GROWTH
For the first time, coastal shipping has been recognised as the fifth official mode of transport in India—alongside road, rail, air, and inland waterways. This classification emphasises the government’s intent to integrate coastal shipping into the country’s multimodal transport architecture and to reduce logistics costs through seamless coastal-inland connectivity. The Act serves as a catalyst for transforming India into a leading regional shipping and trading power. Its provisions streamline licensing, improve transparency, and promote domestic capacity-building—key steps towards aligning India’s coastal trade practices with global standards. Importantly, the law removes outdated bottlenecks, modernises oversight mechanisms, and enhances investor confidence by creating clarity around operational requirements, safety norms, and environmental compliance. Crucially, the Act is designed to work in harmony with flagship initiatives such as Sagarmala and Maritime Vision 2030, ensuring that the expansion of port infrastructure, coastal industrial clusters, and shipbuilding capacity proceeds within a unified national maritime strategy. It is not merely a regulatory reform; it is an enabling framework for infrastructure development, innovation, and sustainable growth across India’s maritime ecosystem.
REMOVING LICENSING BARRIERS: EMPOWERING INDIAN OPERATORS
Under Section 3, the Act abolishes licensing requirements for Indian vessels engaged in coasting trade—a long-awaited reform that dramatically improves ease of doing business for domestic operators. The earlier framework under the Merchant Shipping Act 1958 required most vessels to secure general trading licences, a process fraught with delays and excessive paperwork. By eliminating this hurdle, the new law reduces turnaround time and costs, enhances competitiveness, and incentivises Indian investors to expand domestic fleets. Meanwhile, foreign vessels continue to require licences under clearer, standardised rules—ensuring regulatory balance and national-security safeguards. The result is a more competitive coastal shipping ecosystem that encourages local employment, stimulates shipbuilding, and reduces dependence on foreign-flagged vessels. It also supports the government’s objective of nurturing a strong Indian-flag fleet that can handle a larger share of domestic freight.
STRATEGIC LICENSING: REGULATING FOREIGN PARTICIPATION
Section 4 of the Act establishes transparent, security-conscious criteria for foreign vessels seeking licences for coastal trade. It requires compliance with environmental and safety standards, assessment of existing Indian tonnage on the route, and scrutiny of operational and compliance records. This calibrated approach serves twin objectives—protecting national economic interests while enabling foreign participation under strict oversight. It encourages technology transfer, joint ventures, and international cooperation in ship design, propulsion, and logistics, while reducing dependency on foreign tonnage for domestic routes. Oversight will be exercised primarily through the Directorate General of Shipping (DGS), which has been empowered and digitally modernised to issue licences, conduct vessel surveys, and enforce safety and environmental norms under a single, integrated framework. The shift from an opaque, multi-agency process to a transparent, rule-based regime enhances predictability for investors and strengthens India’s compliance alignment with the International Maritime Organization (IMO) and other global standards.
MANDATORY DIGITAL REPORTING: INTELLIGENCE AND SECURITY GAINS
One of the most forward-looking provisions is Section 6, which introduces mandatory voyage reporting for all coastal vessels—Indian and foreign alike. Ships must now share detailed voyage data, including routes, cargo, and crew information, with designated port authorities through a single-window digital portal. This reform will improve regulatory oversight and enhance maritime domain awareness. Real-time data integration enables authorities to detect suspicious movements, illegal trade, or unauthorised operations. Over time, such reporting will form the digital backbone for automated risk assessment, predictive maritime policing, and environmental monitoring. The DGS and port authorities will be able to leverage big-data analytics, AI-based risk scoring, and automated alerts, providing actionable intelligence to agencies such as the Indian Navy, Indian Coast Guard, and State Marine Police. This seamless flow of information directly strengthens India’s coastal security architecture and brings civilian and security stakeholders onto a unified digital platform.
WHAT ARE THE CHALLENGES AHEAD?
While the Coastal Shipping Act 2025 is a landmark reform, its success will depend on the precision and pace of implementation. The first challenge lies in avoiding bureaucratic delays during the framing of subordinate legislation and procedural rules. Timely and coordinated rule-making will be critical to translate the Act’s provisions into practical outcomes. Ensuring consistency of enforcement across states and ports will be equally important. India’s federal structure often leads to variations in interpretation and compliance, which can create bottlenecks for operators navigating multiple jurisdictions. Bridging existing infrastructure and connectivity gaps remains another major hurdle; ports, coastal roads, and inland waterways must expand in tandem to handle higher cargo volumes efficiently. Fleet modernisation and domestic shipbuilding will require sustained fiscal and policy support, particularly for smaller operators looking to replace ageing vessels. At the same time, India must maintain cost competitiveness against foreign-flag charters, which often enjoy lower operating and financing costs. The Act also calls for capacity-building initiatives—enhanced training, certification, and technical skill development through Maritime Training Institutes and academies—to ensure that Indian seafarers, regulators, and shipyards can meet higher operational and safety standards. Equally vital is the integration of environmental stewardship and community participation. Coastal development must adhere to India’s Green Ports framework and support national decarbonisation and Net-Zero Shipping goals. The inclusion of coastal communities—especially fishing populations—within planning and monitoring mechanisms will ensure that growth remains equitable and sustainable. Ultimately, the Act’s success will hinge on close coordination between central and state authorities, regulators, port operators, and industry partners, working together to address these interconnected challenges with urgency and foresight.
STRENGTHENING COASTAL SECURITY
The Act’s emphasis on reporting and monitoring dovetails naturally with India’s broader coastal-security architecture. As trade and traffic along the coast expand, security mechanisms must evolve at a matching pace. The Indian Navy, Indian Coast Guard, State Marine Police, and allied intelligence and enforcement agencies must coordinate seamlessly to maintain comprehensive coverage of the coastline. Expansion of the Coastal Surveillance Network (CSN), deployment of additional radars and Automatic Identification System (AIS) receivers, and integration of AI-enabled monitoring systems are essential to achieve real-time situational awareness. Regular multi-agency exercises such as Sea Vigil and Sagar Kavach validate operational readiness and improve inter-agency coordination. Coastal communities, too, play a vital role as the “eyes and ears” of maritime security through awareness programmes and reporting mechanisms. By linking the Coastal Shipping Act’s digital-reporting provisions with the Navy-led Information Management and Analysis Centre (IMAC), India can build a unified coastal intelligence grid that fuses economic, environmental, and security data in real time.
TOWARDS A MARITIME INDIA
The Coastal Shipping Act 2025 is far more than a legislative reform—it is a strategic enabler of India’s maritime vision. By simplifying regulations, digitising clearances, and reducing costs, it will catalyse growth in ports, shipyards, and logistics hubs across the country. If implemented effectively, the Act will lower freight costs, expand coastal cargo movement, foster domestic shipbuilding, and enhance safety and environmental standards. Its data-driven regulatory approach lays the groundwork for smart ports, automated cargo systems, and integrated coastal command centres, ensuring that economic progress and national security advance in tandem. By embedding coastal shipping firmly within the framework of Sagarmala, Maritime Vision 2030, and the Blue Economy Policy, India is signalling its determination to become a resilient, self-reliant, and globally competitive maritime power. For India, a strong maritime framework is not merely about trade efficiency—it is about strategic autonomy, sustainable development, and national strength. The Coastal Shipping Act 2025 thus represents a defining step in India’s journey towards becoming a true maritime nation of consequence.
Capt Vikas Anand is presently serving in Naval Headquarters. An alumnus of the Naval Academy, Mandovi, and the Defence Services Staff College, Wellington, he is a navigation and direction specialist and has held various staff, training, and operational appointments during his service tenure.
