Government Introduces Coastal Shipping Bill 2024 to Modernize Maritime Industry
In a significant move aimed at rejuvenating the maritime sector, the government on December 2 introduced the Coastal Shipping Bill, 2024, in the Lok Sabha. The proposed legislation is poised to usher in a new era of efficiency and growth for India’s shipping industry. It seeks to modernize operations, streamline regulations, and enhance the competitiveness of domestic shipping companies, ultimately boosting traffic at the country’s major ports.
Union Minister for Ports, Shipping, and Waterways, Sarbananda Sonowal, while presenting the bill, emphasized the importance of a robust coastal shipping sector in achieving India’s economic and environmental goals. “The bill is a landmark initiative designed to transform the coastal shipping industry, reduce logistics costs, and promote seamless integration with other modes of transport,” Sonowal stated.
Key Objectives and Provisions
The Coastal Shipping Bill, of 2024, focuses on several transformative measures, including regulatory simplifications, financial incentives, and infrastructure development. Its primary goals are to improve the efficiency of domestic shipping operations and promote the use of waterways as a cost-effective and eco-friendly mode of transport.
Here are some of the key features of the bill:
- Simplified Regulations:
The bill proposes a reduction in bureaucratic red tape by introducing a single-window clearance system for all coastal shipping operations. This system will streamline approvals for vessel registration, cargo handling, and port operations. - Priority for Indian Flag Vessels:
To bolster domestic shipping companies, the bill includes provisions for granting priority berthing and cargo-handling facilities to vessels registered under the Indian flag. This move aims to reduce operational costs for Indian players and encourage more companies to register their vessels domestically. - Incentives for Green Shipping:
In line with India’s commitment to sustainability, the bill introduces incentives for the adoption of green technologies. Ship operators using low-emission fuels or energy-efficient technologies will receive subsidies and tax benefits. - Promotion of Coastal Tourism and Passenger Services:
The bill recognizes the untapped potential of coastal tourism. It includes measures to promote passenger ferry services, luxury cruises, and tourism activities along India’s coastline. - Integrated Port Development:
The legislation proposes the development of integrated port infrastructure, linking major ports with road, rail, and inland water transport networks. This integration will reduce turnaround times and improve cargo handling efficiency.
Boosting Domestic Traffic and Reducing Costs
The government’s renewed focus on coastal shipping is expected to drive a substantial increase in domestic cargo traffic. Currently, India relies heavily on road and rail networks for the transportation of goods. Coastal shipping accounts for only a small percentage of the total cargo movement, despite being a more economical and environmentally friendly option.
Industry experts estimate that the use of coastal shipping could reduce logistics costs by up to 25% compared to road transport. Additionally, shifting cargo from congested highways to waterways will alleviate traffic and reduce the wear and tear on road infrastructure.
“India has a vast coastline of over 7,500 kilometres, but its potential remains underutilized,” said R. Kumar, a senior analyst at the Indian Maritime Foundation. “The Coastal Shipping Bill, 2024, is a timely intervention that could significantly increase the share of waterborne trade, benefiting both the economy and the environment.”
Opportunities for Domestic Shipping Companies
The new bill is seen as a game-changer for domestic shipping operators. By prioritizing Indian-flagged vessels and providing financial incentives, it seeks to level the playing field for Indian companies competing with global players.
Currently, many Indian shipping firms register their vessels under foreign flags to take advantage of lower costs and fewer regulatory hurdles. The proposed legislation aims to reverse this trend by making it more attractive for companies to operate under the Indian flag.
Vikram Singh, CEO of a leading Indian shipping company, welcomed the bill’s introduction. “This is a much-needed reform. It not only provides a level playing field but also ensures that Indian companies can compete effectively in both domestic and international markets. We are particularly excited about the incentives for green shipping, as sustainability is a key focus for us.”
Challenges and Industry Concerns
While the bill has been widely lauded, some industry stakeholders have raised concerns about its implementation. One of the primary challenges is the existing infrastructure at Indian ports, which may not be adequate to handle the anticipated increase in traffic.
“There’s a need for significant investment in port infrastructure to realize the full potential of coastal shipping,” said Captain Ajay Mehra, a veteran maritime consultant. “The government must ensure that ports are equipped with modern facilities and technology to handle larger volumes of cargo efficiently.”
Additionally, some experts have called for greater clarity on the financial incentives and subsidies outlined in the bill. They argue that detailed guidelines are necessary to ensure these benefits reach the intended beneficiaries without bureaucratic delays.
Environmental Benefits and Sustainability
One of the standout features of the Coastal Shipping Bill, 2024, is its emphasis on environmental sustainability. The bill aligns with India’s broader efforts to reduce carbon emissions and combat climate change.
Shipping is one of the most energy-efficient modes of transport, emitting significantly less CO₂ per ton-kilometer compared to road and rail. By promoting coastal shipping, the government aims to reduce the carbon footprint of the logistics sector.
The incentives for green shipping are expected to accelerate the adoption of cleaner technologies in the maritime industry. “This is a win-win for both the environment and the economy,” said Dr. Priya Nair, an environmental policy expert. “Encouraging green shipping practices will help India meet its climate goals while also enhancing the competitiveness of its shipping industry.”
Conclusion and the Road Ahead
The introduction of the Coastal Shipping Bill, 2024, marks a pivotal moment for India’s maritime sector. By addressing long-standing challenges and introducing forward-looking measures, the bill has the potential to transform coastal shipping into a key driver of economic growth.
The government is optimistic about securing parliamentary approval for the bill during the ongoing winter session. Once enacted, it will require robust implementation and continuous stakeholder engagement to ensure its success.
“The Coastal Shipping Bill is a step in the right direction,” said Minister Sonowal. “It reflects our commitment to modernizing India’s maritime industry and unlocking its true potential. We are confident that this reform will make India a global leader in coastal shipping.”
With this landmark legislation, India is set to embark on a new journey, steering its maritime industry toward greater efficiency, sustainability, and global competitiveness.
