“In view of the strategic nature of coastal
shipping to the domestic economy and efforts to give impetus to the sector, it
was felt necessary to give due weight to coastal shipping provisions and make
them easily accessible to the industry,” officials aware of the developments
said. “The Bill
removes any licensing requirement for Indian vessels to participate in coastal
trade. The licence conditions for foreign ships have been made statutory
through this Bill,” an official said.
A draft coastal shipping Bill had been introduced
for public comments in 2020 as well. The legislation has been carved out of
Part 14 of the Merchant Shipping Act, 1958, to allow procedural ease for
provisions related to coastal shipping. This part will be repealed once the
Bill is codified into legislation.
Conditions on staffing of crew for foreign vessels are likely to allow
the government to enforce a minimum number of Indian seafarers on all such
coastal vessels. India contributes significantly to the
global seafarer count.
The proposed legislation will also allow coastal
vessels to be operated in inland waterways, along with the creation of a
coastal shipping database.
Industry representatives feel the Bill
is a major step in the right direction, but it needs to be supplemented with
reliefs in provisions and tax burdens that pose a significant cash flow concern
for domestic vessel owners and operators. Shipowners had also sought the
revocation of three orders passed in 2018 which provide exemptions for
foreign-flagged vessels, putting domestic vessels at a competitive disadvantage
The Directorate General of Shipping has moved to
revoke three orders passed in 2018 which allowed foreign-flagged vessels chartered
by foreign entities to engage in coastal trade for specific commodities, such
as EXIM trans-shipment containers, empty containers, agricultural products, and
fertilisers, without a licence from the regulator.