The Hindu Editorial Analysis
04 September 2025
India’s recent maritime reforms need course correction
(Source – The Hindu, International Edition – Page No. – 8)
Topic : GS 2: Government policies and interventions for development in various sectors and issues arising out of their design and implementation
Context
While maritime reform is necessary, it should not undermine the federal structure or distort competitive fairness.
Introduction
The Indian Ports Bill, 2025, passed by the Rajya Sabha on August 18, represents a significant milestone in India’s maritime legislative framework. Replacing the Ports Act of 1908, it forms part of a wider reform package alongside the Coastal Shipping Act, 2025, the Carriage of Goods by Sea Bill, 2025, and the Merchant Shipping Act, 2025—measures the government projects as essential to streamline maritime governance and align shipping regulations with global standards.
Progress but with pitfalls
- Aim to modernise maritime governance, addressing outdated and fragmented regulations.
- Alignment with global best practices seen as vital for trade expansion, foreign investment, and enhancing India’s maritime standing.
- The Indian Ports Act is praised for promoting ease of business, sustainable port development, and regulatory coherence.
- However, its passage without parliamentary debate or standing committee review raises concerns about lack of consensus and scrutiny.
Federalism Concerns in the Ports Act, 2025
- Critics argue the Act centralises power, undermining States’ autonomy.
- The Maritime State Development Council, chaired by the Union Minister, directs States to follow central guidelines.
- Seen as federal subordination rather than cooperative federalism.
- Coastal States lose fiscal autonomy and flexibility since State maritime boards cannot amend frameworks without central approval, despite bearing port management burdens.
Regulatory and Judicial Issues
- The Act grants vague, discretionary powers, creating heavy compliance burdens for small operators.
- Dispute resolution flaws: Clause 17 bars civil courts from hearing port-related disputes.
- Disputes must go to internal committees run by the same authorities being challenged.
- Lack of independent judicial review may deter private investment and weaken trust in regulation.
The issue about ownership
- The Merchant Shipping Act, 2025 aims to modernise registration, ownership, safety, environment, and liability rules, with some positives:
- Broader vessel definitions (offshore drilling units, non-displacement crafts).
- Stricter oversight of maritime training institutes.
- Alignment of liability and insurance rules with international conventions.
- Loophole in ownership rules:
- Earlier law (1958) required full Indian ownership for Indian-flagged vessels.
- The new Act allows partial ownership by Overseas Citizens of India and even foreign entities, with thresholds to be set later by government notification.
- Bareboat Charter-Cum-Demise (BBCD) registration:
- Lets Indian operators lease foreign vessels with an option to buy.
- While globally common, it may strain India’s regulatory capacity to ensure actual transfers of ownership.
- Without strict rules, foreign lessors could retain control indefinitely.
- Additional concerns:
- Mandatory registration for all vessels, regardless of size or propulsion, adds heavy bureaucratic burdenson small operators.
- The Act gives the executive unchecked power to dilute ownership safeguards, risking India becoming a flag-of-convenience state where foreign owners control Indian-flagged ships.
Endangering smaller players
- The Coastal Shipping Act is part of India’s maritime reform package and seeks to clarify cabotage rules, reserving coastal trade for Indian-flagged vessels.
- The Act gives the Director General of Shipping wide discretion to license foreign vessels on vague grounds like “national security” or “strategic alignment”, which could allow arbitrary use.
- Small operators, especially in the fishing industry, may face difficulties with mandatory voyage and cargo reporting because there is no clarity on how data will be used or protected.
- Opposition MPs have cautioned that the Act centralises power with the Union government, threatening local autonomy—a concern also linked to the National Coastal and Inland Shipping Strategic Plan.
Conclusion
This is not to discount the need for a modernised legal framework—India indeed must update its maritime laws. However, reforms must not undermine the federal balance or distort fair competition. Clear ownership thresholds and licensing rules should be enshrined in legislation, not left to executive discretion. Currently, many provisions appear arbitrary—from dispute resolution without judicial independence to sidelining States in planning. Such measures may be a starting point, but without substantial amendments they risk enabling ease of business for a select few, while eroding the federal compact and compromising India’s long-term maritime security.