India’s Maritime Reforms 2025: Opportunities and Challenges
India’s maritime reforms 2025 —Ports Bill, Coastal Shipping Act, and Merchant Shipping Act—aim to modernise governance but raise concerns over centralisation, compliance burdens, and strategic security.
Introduction
In “India’s Recent Maritime Reforms Need Course Correction” (The Hindu, September 04, 2025), Abhijit Singh highlights the promise and perils of India’s 2025 maritime reforms. By passing the Indian Ports Bill, the Coastal Shipping Act, the Merchant Shipping Act, and companion legislation, the government sought to replace colonial-era statutes with a modern framework. The reforms are designed to streamline governance, attract investment, and elevate India’s global maritime standing. Yet, as this essay argues, they also risk excessive centralisation, regulatory ambiguity, and strategic vulnerability. India’s maritime sector, vital for trade and security, stands at a crossroads where reform must be balanced by safeguards.
The Drive for Modernisation
India’s old maritime framework, rooted in the Indian Ports Act of 1908 and the Merchant Shipping Act of 1958, was outdated and inadequate for present needs. These laws were created in an era when shipping was simpler, and issues like offshore drilling, complex financing, and international conventions were not in focus. By 2025, the pressure to modernise was undeniable. The government introduced a suite of reforms intended to unify regulation, reduce inefficiencies, and enhance competitiveness. Digitalisation through initiatives such as a maritime single window, stricter environmental compliance, and new security protocols were rolled out. The package reflected India’s ambition to become a global maritime hub by 2047, aligning with its larger vision of national growth and self-reliance. At first glance, these moves signalled progress by integrating India into global shipping practices and creating conditions for growth.
Federal Balance Under Strain
Yet beneath the surface, critics argue that the reforms undermine India’s federal compact. The Indian Ports Bill, 2025, introduced the Maritime State Development Council (MSDC) chaired by the Union Minister of Ports. Ostensibly a forum for collaboration, in practice the MSDC is empowered to direct states to follow central guidelines. This transforms states into executors of centrally determined plans such as Sagarmala and PM Gati Shakti. Historically, ports were a shared responsibility, with major ports managed by the Centre and smaller ones overseen by states. This arrangement acknowledged regional diversity and local priorities. The 2025 Act disturbs that balance, stripping states of autonomy and flexibility in managing their ports. States like Gujarat, Maharashtra, and Tamil Nadu, with robust maritime economies, may find their innovation and capacity constrained by one-size-fits-all policies from New Delhi. Such centralisation risks breeding resentment and slowing down reforms that require cooperative federalism to succeed.
Regulatory Ambiguities and Judicial Deficits
Beyond federal concerns, the reforms introduce a regulatory environment heavy with discretion but light on clarity. Several provisions grant wide powers to officials without clear guidelines. Most alarming is Clause 17 of the Indian Ports Bill, which removes civil courts from jurisdiction over port-related disputes. Instead, disputes must be resolved by committees established by the very authorities under question. This approach undermines the principle of impartial justice. Investors, whether domestic or foreign, are wary of systems where disputes are not settled independently. The absence of neutral judicial oversight erodes confidence and may deter much-needed capital. A legal framework that appears protective of its own authority rather than fair to all parties risks defeating the very objective of attracting investment and encouraging business.
Ownership and Strategic Security
The Merchant Shipping Act, 2025, also reveals flaws that could undermine strategic autonomy. The earlier 1958 law required Indian-flagged vessels to be wholly Indian-owned. This principle was rooted in national security, ensuring that ships under the Indian flag remained under Indian control. The 2025 law dilutes this safeguard by allowing partial Indian ownership, including by Overseas Citizens of India and foreign entities. The thresholds for such ownership are left to executive notifications, creating uncertainty and handing broad powers to the government of the day. This flexibility risks turning India into a flag-of-convenience jurisdiction, where ships may fly the national flag without being substantively controlled by Indian interests. The introduction of Bareboat Charter-Cum-Demise arrangements, though legitimate globally, adds another layer of risk if oversight is weak. Without strict rules, foreign lessors may retain control indefinitely, undermining the idea of a national fleet available for security and economic needs.
The Struggles of Smaller Operators
The Coastal Shipping Act, 2025, was meant to strengthen cabotage rules by ensuring that only Indian-flagged vessels engage in domestic trade. While this appears supportive of national operators, the law imposes compliance requirements that are especially harsh for small players. Fishing communities and small transporters face obligations for voyage and cargo reporting without clear guidance on how their data will be used or safeguarded. Meanwhile, large corporate operators may be better placed to navigate the system, especially since the Act grants the Director General of Shipping sweeping powers to licence foreign vessels under open-ended grounds like national security or strategic alignment. This imbalance risks driving out smaller players and consolidating power in the hands of larger firms, thereby reducing diversity and resilience in the maritime economy. For India, where livelihoods of many coastal communities depend on small-scale maritime activity, such an outcome would be deeply inequitable.
Environmental and Security Dimensions
The reforms also emphasise sustainability and maritime security, but here again gaps emerge. While environmental compliance is written into the new laws, the ability of ports and local authorities to enforce these standards varies widely. Increased shipping activity risks aggravating pollution, damaging fragile coastal ecosystems, and intensifying dredging-related impacts. Similarly, as India expands its port capacity, it must contend with maritime security threats such as smuggling, trafficking, and piracy. Without adequate resourcing and coordination, environmental and security safeguards risk remaining aspirational rather than effective. True reform must allocate not just legislative intent but also institutional capacity and funding to enforcement agencies.
Pathways to a More Balanced Reform
If India’s maritime reforms are to realise their potential, corrective steps are essential. First, cooperative federalism must be restored by giving states a genuine role in planning and decision-making within the MSDC. Second, ownership thresholds for Indian-flagged vessels must be clearly set in law to avoid backdoor foreign control. Third, access to independent courts must be guaranteed for dispute resolution, replacing committees with impartial judicial forums. Fourth, compliance requirements should be proportionate, easing the burden on small operators while maintaining standards for larger ones. Finally, enforcement of environmental and security safeguards must be strengthened with resources, technology, and capacity-building. These measures would balance ambition with fairness, inclusivity, and resilience.
Conclusion
India’s maritime reforms of 2025 represent a landmark attempt to modernise governance and position the country as a global maritime power. They replace outdated colonial-era laws, promote ease of doing business, and promise to align India with global practices. Yet, as Abhijit Singh and other experts point out, they also introduce risks of centralisation, opaque regulation, and marginalisation of smaller players. India’s maritime sector, with its vast coastline and strategic importance, deserves reforms that combine modernisation with equity. The true measure of success will be whether these reforms empower not just the Centre or large corporations, but also states, small operators, and coastal communities. By addressing their shortcomings through inclusive and transparent measures, India can ensure its maritime laws serve as a foundation for long-term prosperity and security.
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The Source’s Authority and Ownership of the Article is Claimed By THE STUDY IAS BY MANIKANT SINGH
