Coastal Shipping Bill 2024 introduced in Lok Sabha, no licensing required for Indian-flagged ships in coastal trade

India-flagged ships engaged in coastal trade (within the country) will not need licences, while foreign flagged ones still need to go through a licensing process of the DG Shipping, as per the new Coastal Shipping Bill 2024 introduced in the Lok Sabha on Monday, by Union Shipping Minister, Sarbananda Sonowal.

This is the first time that the country will look at formalising regulations on coastal trade and shipping benefitting domestic shipping lines. It is also aimed at simplifying regulatory procedures for domestic players, give them greater operational freedom and also allow selective opening up of inland waterways.

The Bill defines coasting trade as carriage of goods or passengers by sea from any port or place in India to any other port or place in India, or performing any service within the coastal waters; but shall not include fishing of any kind.

“No vessel other than an Indian vessel shall engage in coasting trade in the coastal waters except under a licence granted by the Director – General....” the Bill reads.

New licensing norms

New licensing norms mention of checking whether earlier licences (of foreign flagged ships) were cancelled or not, citizenship of the crew, availability of Indian vessels on the route in which these ship intend to operate and so on.

The Director – General (Shipping) shall continue to be reporting authority with ships sharing details of their voyage, ports visited along the route, passenger and cargo details and so on.

The current regulatory framework – included in the Part XIV of Merchant Shipping Act of 1958 – requires Indian ships chartered by Indian citizens and foreign to obtain licence before taking a ship to sea, including for coastal trade. Post introduction of this new Bill, Part XIV will be repealed.

“However, the licensing requirement for all vessels including Indian vessels and exclusion of foreign flag non-propelled vessels from coasting trade has proven to be a hindrance to competition and efficiency in the sector,” a Ministry official explained.

National Coastal and Inland Shipping Strategic Plan

The Bill also proposes that the Centre shall within a period of two years from the date of commencement of this Act publish a National Coastal and Inland Shipping Strategic Plan which shall be updated every two years.

The strategic plans will include assessment of coastal routes in India including routes occupied by inland waterways, identification of operational improvements required in coastal shipping, long term traffic forecast – for both coastal shipping and inland waterways, measures for promotion of building, registration and participation of Indian vessels in coastal shipping, among others.

Greater coordination with inland waterways authority has also been mentioned in the Bill whereby inland vessels will be allowed to take part in coastal trade subject to certain conditions.

A National Database of Coastal Shipping is also proposed to be set up for greater transparency and information sharing.

Penalties have also been proposed in the Bill that vary between ₹1,00,000 to ₹15,00,000 depending on the quantum of offence that include deliberately providing misinformation, flouting of licensing norms or otherwise. A six month imprisonment has also been proposed, if necessary.

“The provisions of this Bill will not involve any expenditure of recurring or non recurring nature from the Consolidated Fund of India,” it stated in the Financial Memorandum.