Introduction to new Merchant Shipping Act 2025

—Adv. (Capt.) Ashwani Jhingan

The government aims to boost India’s role in global maritime trade and shipping through the Maritime India Vision 2030 (MIV 2030) initiative, which focuses on port development, shipbuilding, and increasing the share of Indian-flagged ships in overseas cargo. The blueprint of MIV 2030 outlines strategies for coordinated and accelerated growth of the maritime sector.

The state of India’s maritime sector 

* Strategic and Trade Backbone: India ranks as the 16th largest maritime nation, handling about 95% of its trade by volume and about 70% by value via sea routes, with 12 Major and 200+ minor ports positioned along key global shipping routes. A robust maritime sector is indispensable for realising the vision of a $5 trillion economy and cementing India’s position as a global economic powerhouse.

* India’s Seaborne Freight: In 2022, India was ranked 18th globally in shipowning, controlling a meagre 1.4% of the global tonnage. In comparison, India’s export-import trade is about 11% of the global seaborne cargo trade, and this share is expected to rise to 30% by 2047.

In FY20, India paid $85 billion in sea freight, of which some $75 billion was paid to foreign shipping companies, resulting in a huge outflow of foreign exchange. This is because the share of overseas cargo carried by Indian-flagged vessels has dwindled from 40.7% in 1988 to less than 5% now. Between 2008 and 2021, the reliance on foreign fleets for hauling export-import cargo led to outbound freight charges of a whopping $637 billion, according to a document prepared by the Ministry of Ports, Shipping and Waterways.

Expanding India’s shipping tonnage is estimated to cost some ₹55 lakh crore, according to the Maritime Amrit Kaal 2047 Vision Document.

* Expanding Capacity and Fleet: The cargo-handling capacity of Major Ports grew by 87% (2014-24), reaching 1,629.86 million tonnes, with 819.22 MT handled in FY24; India operates a fleet of 1,530 registered ships. 

(a) India ranks 38 out of 139 countries on the World Bank’s Logistics Performance Index Report 2023, indicating improved logistics and trade efficiency. 

(b) Singapore and Finland are the most efficient and highest-ranked LPI countries as per the 2023 LPI, from which India can learn. 

* Policy Support and Export Growth: Measures like 100% FDI under the automatic route, 10-year tax holidays, and infrastructure modernisation have driven port development and boosted exports to USD 451 billion in FY23.

Significance of overhauling India’s maritime legal framework: 

The merchant shipping industry has experienced significant changes internationally in recent years, presenting various challenges to Indian shipping. 

* Aligning India’s maritime framework with global conventions and international protocols: MSA 2025 is a landmark legislation aimed at modernising India’s maritime framework, fostering a globally competitive, sustainable and efficient maritime sector, reinforcing the country’s vision of a developed India. It aligns Indian laws with international best practices, global standards, IMO conventions, enhances safety, improves seafarer welfare, and simplifies regulatory procedures for ship ownership and registration, ensuring that the country’s maritime sector remains equipped, ready and relevant to contemporary and future challenges.

* Driving economic growth and global standing: The Bills are expected to attract foreign investment, increase shipping tonnage and position India as a maritime power, directly contributing to the vision of Viksit Bharat.

* Strengthening regulatory and safety frameworks: By merging regulation with enabling policies, the new framework promotes seafarer welfare, marine ecosystem protection, and high safety standards at sea.

* Addressing the need for modernisation: India’s maritime laws, some dating back decades, were unable to cope with present-day global trade realities, making legislative reform essential for competitiveness.

* Streamline coastal trade and prioritise Indian-owned vessels in domestic waters: Enhance supply chain security by increasing Indian ships’ participation in domestic cargo movement. India moves a step closer to building a rule-aligned, integrated, efficient, and globally competitive coastal and inland shipping ecosystem, while securing the country’s vast 7,500 km coastline for strategic and commercial benefit.

* Reduce India’s dependence on foreign vessels, thereby preventing the outflow of foreign exchange. 

* Promotes ease of doing business for Indian shipping operators, cuts freight costs and enhances multimodal transport efficiency.

*Catalyses local economic development, generating employment opportunities across coastal regions. 

Need for the new Act?

* The Merchant Shipping Act, 1958 was enacted to foster the development and ensure the efficient maintenance of an Indian mercantile marine in a manner best suited to serve the national interests, establish a ‘National Shipping Board’, and to provide for the registration, certification, safety and security of Indian ships. MSA 1958 had become bulky, fragmented and outdated with 561 sections, failing to address maritime challenges or fully implement India’s obligations under several key IMO conventions.

* The Merchant Shipping Bill, 2024, was passed by the Lok Sabha on August 6, 2025 and by the Rajya Sabha on August 11, 2025. The Bill was signed by the President on August 18, 2025 and the Merchant Shipping Act 2025 came into being.

* The new law streamlines the framework from 561 sections to 16 parts and 325 clauses, focusing on:

(a) Reducing compliance burdens to improve ease of doing business

(b) Enhancing navigation safety and life-at-sea protection

(c) Safeguarding the marine environment

(d) Boosting tonnage under the Indian flag

(e) Strengthening emergency preparedness and salvage operations

(f) Protecting India’s coastline and maritime interests

* The Act 2025 aims to make India a globally respected maritime jurisdiction and unlock sustainable growth, investment and innovation in the sector. Adoption of global standards through these Acts will reduce legal disputes, streamline cargo movement and enhance India’s role as a trusted trade hub.

* Enhanced Safety and Emergency Preparedness: The Act strengthens navigation safety, life-at-sea protections and emergency response mechanisms, including salvage operations and environmental safeguards. It introduces stringent safety protocols, pollution prevention measures, and comprehensive waste management requirements for ships. The legislation also emphasises seafarer welfare, strengthening training, certification and dispute resolution in accordance with the Maritime Labour Convention. 

* Promotion of Indian tonnage: It introduces measures to encourage registration of vessels under the Indian flag, boosting national shipping capacity and maritime presence. The Act seeks to promote ease of doing business in the maritime sector, increase India’s tonnage, strengthen the country as a bankable shipping jurisdiction, enhance welfare of Indian seafarers, and improve adjudication and predictability of claims.

* Reduced compliance burden: By cutting unnecessary regulations, the Act improves ease of doing business in the maritime sector, fostering innovation and attracting investment. MSA 2025 reduces compliance burdens, promotes Indian tonnage and prioritises seafarer welfare.

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