The new Merchant Shipping Bill, introduced by Union Minister Sarbananda Sonowal in the Lok Sabha, aims to modernize India’s maritime sector by overhauling the outdated Merchant Shipping Act of 1958. This legislative reform seeks to enhance ease of doing business, expand India’s tonnage in maritime shipping, and improve the welfare of Indian seafarers, while also positioning India as a competitive and bankable shipping jurisdiction.
Key features of the Bill include broadening ownership criteria for Indian vessels. It allows Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), joint ventures, and corporations to own and invest in ships registered under the Indian flag. The Bill also facilitates the registration of foreign vessels chartered under bareboat charter cum demise (BBCD) contracts, thereby encouraging foreign investment and improving India’s global trade presence. Currently, India holds a mere 1.4% of global shipping tonnage, far below its 11% share of global seaborne trade, which the government aims to increase to 30% by 2047.
Additionally, the Bill intends to address the declining trend of Indian-controlled shipping. Between 1988 and 2022, India witnessed a significant drop in the proportion of overseas cargo transported by Indian vessels, indicating a heavy reliance on foreign fleets for trade. In FY20 alone, India spent $85 billion on sea freight, with around $75 billion going to foreign carriers. This reliance raises concerns about national security in times of geopolitical tension.
To counter this trend, the Bill proposes a more flexible framework for ship registration, enabling almost anyone with substantial Indian stakes, including NRIs and LLPs, to register under the Indian flag. The planned reforms aim to rejuvenate the domestic shipping sector and increase participation, thereby bolstering India’s maritime capabilities and reducing the economic outflow caused by dependence on foreign shipping services.
The legislation also embodies commitments to the welfare of Indian seafarers. It aligns with international standards set forth by the Maritime Labour Convention (MLC) to ensure decent work conditions, safety, and protection for seafarers. Provisions are included for the relief of abandoned seafarers and for improved scrutiny and accountability of recruitment agencies responsible for their placement.
Moreover, the Bill encompasses critical measures to tackle marine pollution. It introduces robust monitoring and emergency response frameworks aligned with international maritime conventions, thereby empowering India to manage marine incidents proactively.
In summary, the Merchant Shipping Bill represents a crucial step towards modernizing India’s maritime framework, promoting domestic ship ownership, enhancing welfare for seafarers, and contributing significantly to India’s economic aspirations. Its successful enactment is expected to stimulate the maritime sector, leading to a stronger national shipping fleet and a more competitive stance in global trade.
