In a landmark move to unlock the economic potential of India’s coastline, Parliament has passed the Coastal Shipping Bill, 2025, a legislative overhaul designed to modernise coastal shipping, simplify rules and dramatically expand the share of coastal cargo moved by Indian vessels. The Rajya Sabha approval on August 7 follows earlier Lok Sabha clearance and marks a decisive step toward an integrated coastal and inland shipping ecosystem.
The Coastal Shipping Bill 2025 replaces Part XIV of the Merchant Shipping Act, 1958, and is being billed as a future-ready legal framework aligned with global cabotage norms. Union Minister for Ports, Shipping & Waterways Sarbananda Sonowal said the Act aims to increase coastal cargo throughput to 230 million metric tonnes by 2030, strengthen supply-chain security and promote an Atmanirbhar maritime sector. The government says the new law will reduce regulatory burdens and boost the competitiveness of Indian vessels engaged in domestic trade.
Structurally, the Coastal Shipping Bill, 2025 is concise but strategic — comprising six chapters and 42 clauses that introduce a simplified licensing regime for coastal operations and a framework for regulating foreign vessels involved in coasting trade. Crucially, the Bill mandates the formulation of a National Coastal and Inland Shipping Strategic Plan, which will serve as a roadmap for future infrastructure development, investment, policy priorities and inter-modal linkages. Officials view the plan as the central policy instrument to drive coordinated growth of coastal and inland shipping.
A central plank of the legislation is institutional transparency: the Act provides for the creation of a National Database for Coastal Shipping. This database is intended to deliver real-time, authentic and regularly updated information for investors, shipowners and policymakers — boosting investor confidence and improving planning across ports, logistics and coastal industries. By centralising data, the government expects smoother coordination between states, private operators and central agencies, which is critical to scale up coastal cargo movement.
Policy analysts say the Coastal Shipping Bill 2025 is designed to accomplish several strategic objectives simultaneously: reduce dependence on foreign tonnage for domestic coastal routes (thereby curbing foreign exchange outflows), catalyse coastal industrial and port-led development, and create jobs across coastal regions. By simplifying licensing and regulatory compliance, the law aims to make coastal shipping an attractive commercial choice for cargo owners and logistics companies, shifting modal share from road and rail to cost-effective coastal routes.
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The passage of this Bill also completes a legislative package the Ministry has pursued this year. With the Merchant Shipping Bill, the Carriage of Goods by Sea Bill and now the Coastal Shipping Act all approved by Parliament, the ministry argues India has a modernised legal foundation to support a “future-ready” maritime ecosystem that can better integrate coastal and inland shipping services with national objectives such as Viksit Bharat and Atmanirbhar Bharat.
Implementation will determine impact. Experts note that while the Coastal Shipping Bill 2025 provides the legal scaffolding, realizing the 230 MT target by 2030 will require coordinated investment in feeder vessels, coastal terminals, last-mile multimodal connectivity, simplified port procedures, and incentives to shift cargo from land routes to coastal corridors. Capacity-building for regulators and streamlined state-federal coordination will be essential to translate licensing reforms into higher volumes of coastal cargo.
Industry reaction has been broadly positive. Shipowners and logistics firms welcomed the move as a long-awaited modernization of the coastal shipping regime that should improve ease of doing business and attract private investment into coastal shipping assets and infrastructure. Coastal states and port operators will be watching the rollout of the National Coastal and Inland Shipping Strategic Plan closely, since its investment priorities and regulatory details will heavily influence project pipelines and financing.
The coastal shipping reform sits amid a wider maritime vision: a digitally enabled, interoperable maritime sector that supports trade resilience and port-led industrial growth. If implemented effectively, the Coastal Shipping Bill, 2025 could help shift significant cargo volumes to coastal routes, reduce logistics costs, create jobs in coastal communities and strengthen India’s stature as a competitive maritime nation.
Source: (Press Information Bureau)
