Why in News : The Indian Ports Bill, 2025, recently passed in the Rajya Sabha, seeks to repeal the colonial-era Indian Ports Act, 1908.
Introduction
- It forms part of a legislative package including the Coastal Shipping Act, 2025, Carriage of Goods by Sea Bill, 2025, and Merchant Shipping Act, 2025, aimed at modernising India’s maritime governance and aligning with global practices.
- However, concerns of federal overreach, executive discretion, regulatory opacity, and risks to small operators have raised demands for course correction.
Background: India’s Maritime Context
- India has a 7,500 km coastline, 12 major ports, and ~200 minor ports, handling ~95% of India’s trade by volume.
- Shipping sector contributes to Blue Economy, Sagarmala & Gati Shakti projects, and India’s aspiration to be a maritime power in the Indo-Pacific.
- Previous laws (Ports Act, 1908; Merchant Shipping Act, 1958) were outdated, necessitating reforms.
Key Features of the New Maritime Laws
1. Indian Ports Bill, 2025
- Establishes Maritime State Development Council (MSDC) chaired by Union Minister.
- Mandates central guidelines for port development aligned with Sagarmala/PM Gati Shakti.
- Bars civil courts from hearing port-related disputes → internal committees for dispute resolution.
2. Merchant Shipping Act, 2025
- Expands vessel definition (offshore drilling, non-displacement crafts).
- Tightens oversight of maritime training and liability/insurance aligned with global conventions.
- Allows part ownership by OCIs/foreign entities; thresholds left to government notification.
- Recognises Bareboat Charter-Cum-Demise (BBCD) registration.
- Mandatory registration of all vessels irrespective of size.
3. Coastal Shipping Act, 2025
- Strengthens cabotage (Indian-flagged vessels for coastal trade).
- DG Shipping given discretion to licence foreign vessels on vague criteria (“national security”, “strategic plans”).
- Mandatory voyage/cargo reporting, burdening small operators (e.g., fishing industry).
Criticisms and Challenges
A. Federal Concerns
- MSDC structure reduces State autonomy in port development.
- State maritime boards cannot adjust frameworks without central approval → undermines cooperative federalism.
B. Concentration of Executive Power
- Excessive delegated legislation: ownership thresholds, licensing, approvals left to executive notification.
- Risks arbitrariness and politicisation of maritime policy.
C. Judicial Independence and Dispute Resolution
- Clause 17 (Ports Bill) excludes civil courts → internal committees may lack impartiality.
- Could deter private investment and undermine investor confidence.
D. Ownership Loopholes
- Dilution of full Indian ownership → risk of flag-of-convenience jurisdiction.
- BBCD may allow foreign lessors to retain effective control indefinitely.
E. Impact on Small Operators
- Small coastal/fishing operators face compliance burdens without adequate institutional support.
- Risk of market capture by large players at the cost of inclusive maritime development.
Positive Aspects of the Reforms
- Long-overdue repeal of colonial-era Acts.
- Alignment with global conventions (safety, liability, insurance).
- Support for ease of doing business and investment attraction.
- Recognition of offshore vessels and global financing tools (BBCD).
- Attempt at integrated maritime planning under Sagarmala & Gati Shakti.
Way Forward / Course Correction
1. Strengthen Cooperative Federalism
- Restructure MSDC to ensure equal voice of States.
- Create space for regional port authorities in decision-making.
2. Clarity on Ownership and Flag Security
- Define clear statutory thresholds for Indian ownership.
- Strict oversight of BBCD leases to ensure eventual transfer.
3. Independent Dispute Resolution
- Establish maritime tribunals/courts instead of internal committees.
- Judicial review must remain available for fairness and investor trust.
4. Balance Ease of Business with Safeguards
- Regulatory discretion should be bounded by clear rules and checks.
- Avoid excessive executive notifications and ensure parliamentary oversight.
5. Protect Small Operators
- Provide compliance support, digital platforms, and exemptions for small vessels.
- Safeguard livelihoods of traditional fishing communities.
6. Promote Transparency
- Ensure parliamentary scrutiny (Standing Committee review) for major maritime legislation.
- Open consultations with States, industry, and civil society.
Conclusion
India’s maritime reforms are a step towards modernisation of an outdated framework, essential for India’s ambition to be a leading maritime nation. However, centralisation of power, dilution of ownership safeguards, and burdens on smaller players risk undermining the very objectives of reform
UPSC Relevance
GS Paper II (Polity & Governance): Federalism, Centre-State relations, delegated legislation.
GS Paper III (Economy & Security): Infrastructure, shipping, Blue Economy, national security.
Mains Practice Question:
Q. Critically evaluate the recent maritime reform legislations in India. Do they strike the right balance between modernisation, cooperative federalism, and maritime security?
