Parliament Passes Merchant Shipping Bill, 2025

On August 11, 2025, the Indian Parliament gave its nod to the Merchant Shipping Bill, 2025, marking a pivotal moment toward modernizing the nation’s maritime legal framework. The Rajya Sabha passed the bill via a voice vote, following its approval in the Lok Sabha on August 6, 2025. This legislation replaces the antiquated Merchant Shipping Act of 1958—a bulky and fragmented statute that failed to keep pace with contemporary maritime challenges.

Context: Why Reform Was Imperative

A Dilapidated Framework

The Merchant Shipping Act, 1958 was criticized for its overly extensive structure—comprising 561 sections—and being ill-equipped to enforce international standards and protect India’s maritime interests effectively.

Low National Tonnage

India’s share in global shipping tonnage remained dismally low—1.4%, as of 2022—despite accounting for around 11% of global seaborne trade. The resulting impact was severe: in FY20 alone, India paid $85 billion in sea freight, of which $75 billion flowed out to foreign shipping companies—thanks to its over-reliance on non-Indian fleets.

Vulnerability in a Volatile World

Dependence on foreign-flagged vessels exposed India to disruptions arising from global crises like the COVID-19 pandemic, geopolitical conflicts, and piracy threats—weaknesses the new law aims to address.(The Economic Times)

Key Provisions of the Merchant Shipping Bill, 2025

1. Broader Ownership Eligibility

• Enables NRIs, OCIs, body corporates, and joint ventures to own Indian-flagged merchant vessels.
• Allows bareboat charter cum demise (BBCD) ships to be registered under Indian flag even before full payment—facilitating earlier inclusion in national tonnage.

2. Modernized Registration Processes

• Introduces electronic registration, and legal recognition for digital agreements, logbooks, licenses, certificates, and payments.
• Mandates an electronic inspection database, enabling risk-based inspections and greater efficiency in port state controls.

3. Marine Casualty Inquiry Powers

Strengthens authority to investigate marine accidents and embark on inquiries—bolstering safety oversight.

4. Global Alignment & Environmental Safeguards

Aligns Indian legislation with key IMO conventions, enhancing safety, pollution control, and environmental standards.

5. Seafarer Welfare & Education

Empowers regulators—particularly the Director-General of Marine Administration—to standardize and oversee maritime education and training, ensuring Indian seafarers comply with global benchmarks.

Repealing the 1958 Act: A Fresh Start

The new bill systematically repeals the Merchant Shipping Act of 1958, shedding its outdated provisions and streamlining the legal framework under a forward-looking, digitally enabled structure.

Political Dynamics: Passage Amid Turmoil

• Lok Sabha (August 6): Passed during intense protests by the Opposition demanding discussion on Bihar’s Special Intensive Revision (SIR) of electoral rolls.
• Rajya Sabha (August 11): Approved via voice vote despite walkouts and brief adjournments triggered by continuing protest over the Bihar issue.

What the Government Says

Union Minister Sarbananda Sonowal called the bill a “decisive step toward positioning India as a global leader in maritime trade.” Offering a striking contrast to the 1958 Act, he highlighted its 16 parts and 325 clauses, representing a modern, streamlined, internationally-aligned legal framework. It focuses on seafarer welfare, compliance reduction, environmental protection, and boosting Indian tonnage.

Strategic Significance: Why This Matters

Shipping Self-Reliance

Empowers India to build and control its shipping fleet and reduce costly liabilities to foreign operators.

Enhanced Trade Competitiveness

Timely registration and streamlined compliance boost Indian carriers’ participation in global trade.

Digital Transformation in Maritime Governance

Digital records and processes increase transparency, reduce bureaucracy, and elevate port state control efficiency.

Economic Security & Resilience

Greater capacity in Indian maritime assets shields against geopolitical and supply disruptions—key to national security.

Seafarer and Sectoral Development

Unified training standards and regulatory oversight aim to elevate Indian maritime human capital.

Broader Regulatory Ecosystem: Linked Developments

The Merchant Shipping Bill complements other maritime law reforms, like the Carriage of Goods by Sea Bill, 2025 (passed on August 6) and the Bills of Lading Bill, 2025 (cleared on July 22)—both designed to streamline documentation, improve transparency, and align India’s shipping laws with global norms .

Looking Ahead: Implementation and Impact

1. Presidential Assent & Notification
   Once signed into law, effective implementation timelines and drafting of necessary rules will commence.
2. Digital Infrastructure Rollout
   Government must establish secure and accessible electronic registration systems and inspection databases.
3. Investor Engagement & Corporate Communication
   Awareness campaigns to attract private and NRI/OCI investment under the new ownership incentives.
4. Capacity Building
   Train regulators, port authorities, and industry stakeholders on digital processes and risk-based inspections.
5. Monitoring Tonnage Growth
   Track shifts in national shipping percentage and maritime trade volumes—a key performance indicator.
6. Policy Review & Legislative Updates
   Monitor enforcement outcomes and adjust regulations in alignment with evolving maritime scenarios.