India’s Ministry of Ports, Shipping and Waterways (MoPSW) is planning to do away with licensing norms in coastal shipping, while allowing easier but selective access to the country’s inland waterways. The proposed Coastal Shipping Bill 2024, likely to the tabled during the upcoming Winter Session of the Parliament, will remove the requirement of general trading license for Indian flagged vessels that are engaged in coastal trade. This in turn will promote tonnage under Indian flag.
The Coastal Shipping Bill will repeal and replace parts of the Merchant Shipping Act 1958. The new legislation will help improve the modal share of coastal shipping from the current 6.4 per cent levels to 7.5 per cent by 2030 and ultimately to 12 per cent by 2047.
Compared to India, the share of coastal shipping in Japan and the EU is five to six times higher, and the same is about seven times higher in China.
The Coastal Shipping Bill 2024 has already received Cabinet approval.
The Bill will be the second major maritime trade-related legislation that India will look to overhaul during the upcoming Winter Session. The Merchant Shipping Bill is the other major legislation set for a complete renactment.
Co-ordination with Inland Waterways
Incidentally, the proposed Bill helps improve coordination of coastal trade vessels & ships with India’s inland waterways. Such activities - access to inland waterways by coastal ships - needed permission of DG Shipping and a variety of other clearances, which now will be relaxed to some extent.
“The Bill paves the way to accelerate ease of doing business by removing the requirement of general trading license for Indian flag vessels engaged in coastal trade,” an official aware, told businessline.
The proposed legislation will create avenues for integration of coastal shipping with inland waterways, as envisaged in Sagarmala.
A comprehensive plan for integration and development of a database for coastal shipping is underway too. This database – which will include information on issues licenses and permissions - will help ease and expedite the processes for distinct budgetary allocations in future; and aid in promotion of the coastal shipping sector or introduction for other policy interventions.
“It will also increase the visibility of the potential for growth and investment in coastal shipping and attract investment,” a second official said.
Positive for seafarers
The bill allows the government to set conditions for the staffing of foreign vessels, such as needing a minimum number of Indian seafarers. Proposed in the Bill are provisions related to employment of Indian seafarers. This includes having conditions where vessels built in India, or a foreign vessel engaged in coastal trade but having a high percentage of Indian seafarers could see relaxed operating norms.
Indian ship-building will receive an impetus as a result of this legislation, which according to MoPSE officials will favour India-built ships for coastal shipping and trade.