Context: In the biggest overhaul of India’s maritime legal framework, two landmark legislations- ‘Carriage of Goods by Sea Act, 2025’, and the ‘Coastal Shipping Act, 2025’ have been enacted.
Relevance of the Topic: Prelims: Key provisions of ‘Carriage of Goods by Sea Act, 2025’, and the ‘Coastal Shipping Act, 2025.’
Overhaul of India’s Maritime Legal Framework
- The Carriage of Goods by Sea Act, 2025 replaces outdated provisions of the Indian Carriage of Goods by Sea Act, 1925.
- The Coastal Shipping Act, 2025 seeks to simplify and modernise the legal framework governing coastal shipping. It replaces outdated provisions of Part XIV of the Merchant Shipping Act, 1958.
Carriage of Goods by Sea Act, 2025
- The Carriage of Goods by Sea Act, 2025 adopts Hague-Visby Rules, a globally accepted maritime standard. It standardises Indian maritime trade law with globally accepted norms (especially regarding bills of lading and cargo liability).
- The Act lays out clearly defined roles, responsibilities, liabilities and protections for parties involved in the carriage of goods by sea to reduce legal disputes.
- It caps carrier liability to provide predictability for shippers and insurers. Exemptions cover force majeure events like war and natural disasters, while allowing negotiated terms for special cargo.
- The Act outlines clear rules around the Bill of Lading- including who is responsible if something goes wrong, and what rights both parties have. The government can update or modify the rules related to bills of lading, without needing to bring a new law to Parliament.
Bill of Lading:
- It is a legal receipt issued by a shipping company to the person sending the goods.
- It lists what goods are being shipped, their quantity and condition, and where they are going.
- It acts as proof of ownership of the goods and is essential for international trade.
Coastal Shipping Act, 2025
The Coastal Shipping Act, 2025 consolidates rules for coasting trade, defined as cargo or passenger movement between Indian ports or related offshore activities.
- It introduces a simplified licensing system for coastal shipping and lays down the framework for regulating foreign vessels engaged in coasting trade.
- It requires foreign vessels to obtain licences from the Director-General of Shipping.
- Indian vessels, while exempt from licensing, must meet reporting norms.
- The Act mandates formulation of National Coastal and Inland Shipping Strategic Plan to map routes, forecast traffic and integrate coastal shipping with inland waterways. It has to be updated every two years.
- It provides for creation of a National Database for Coastal Shipping to enable real-time access to authentic and regularly updated data. This database will keep potential investors informed about the government’s development plans and policy priorities.
- Strict penalties target unlicensed operations, false declarations and safety breaches. The government is empowered to reroute or ban vessels in public interest or for national defence.
Significance of overhauling India’s Maritime Legal Framework:
- Align India’s maritime framework with global conventions and international protocols.
- Streamline coastal trade and prioritise Indian-owned vessels in domestic waters. Enhance supply-chain security by increasing Indian ships’ participation in domestic cargo movement.
- The National Database for Coastal Shipping will promote transparency and confidence.
- 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.
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 7500 km coastline for strategic and commercial benefit.