India’s maritime sector witnessed legislative overhaul in 2025. The Indian Ports Bill, 2025, passed in August, replaces the century-old 1908 Act. It is part of a broader reform package that includes the Coastal Shipping Act, 2025, the Carriage of Goods by Sea Bill, 2025, and the Merchant Shipping Act, 2025. These laws aim to modernise India’s maritime governance, align it with global standards, and boost trade and investment. However, the reforms have sparked debate over federalism, regulatory clarity, and the impact on smaller stakeholders.
Modernising Maritime Governance
India’s maritime laws were outdated and fragmented. The new Acts seek to streamline regulations and promote sustainable port development. The Indian Ports Act, 2025, introduces the Maritime State Development Council to coordinate policy. The government claims this will ease doing business and improve port infrastructure. The package also updates shipping safety, environmental rules, and liability frameworks to meet international norms.
Centralisation and Federal Concerns
The new Ports Act centralises power with the Union government. The Maritime State Development Council, chaired by the Union Minister, can direct States on port policies. This limits States’ autonomy and fiscal control over their ports. Critics argue this undermines cooperative federalism and forces States to follow central plans like Sagarmala and PM Gati Shakti, regardless of local priorities. State maritime boards lose flexibility to adapt rules independently.
Dispute Resolution and Regulatory Risks
The Ports Act bars civil courts from hearing port disputes. Instead, internal committees formed by port authorities will handle conflicts. This raises concerns about impartiality and judicial independence. Experts warn that lack of fair dispute resolution could deter private investment. The law also grants vague discretionary powers to regulators, risking excessive compliance burdens on smaller operators.
Changes in Shipping Ownership Rules
The Merchant Shipping Act, 2025, modernises vessel registration and ownership norms. It permits partial Indian ownership including Overseas Citizens of India and foreign entities. However, ownership thresholds are not fixed and will be set by government notifications. The Act also allows Bareboat Charter-Cum-Demise registration, enabling foreign leasing of vessels. This could lead to foreign control without clear transfer rules. The law mandates vessel registration regardless of size, increasing bureaucracy for small operators.
Impact on Coastal Shipping and Small Operators
The Coastal Shipping Act clarifies cabotage rules to protect Indian-flagged vessels in domestic trade. Yet, it gives the Director General of Shipping broad powers to licence foreign vessels on vague grounds like national security. This may be applied arbitrarily. Small operators, especially fishermen, face new reporting requirements without clear guidelines on data use or protection. Opposition voices warn the Act concentrates power at the Centre, risking local autonomy and fair competition.
Challenges Ahead
While these reforms modernise India’s maritime framework, they raise critical issues. Centralisation risks weakening federal balance. Ambiguous ownership and licensing rules may invite regulatory uncertainty. Lack of judicial oversight in dispute resolution undermines trust. Small players could be disproportionately burdened. The success of these laws depends on future amendments that ensure clarity, fairness, and cooperative governance.
Questions for UPSC:
- Discuss in the light of India’s federal structure how centralisation in maritime governance can impact state autonomy and economic development.
- Critically examine the role of dispute resolution mechanisms in regulatory frameworks with reference to judicial independence and investor confidence.
- Explain the concept of cabotage and discuss its significance in protecting domestic shipping industries with suitable examples.
- With suitable examples, discuss the challenges and benefits of aligning national maritime laws with international conventions in the context of global trade.
