2026 | Vol 2(3) | March

The Central Government has appointed March 15, 2026 as the date on which the provisions of the Merchant Shipping Act, 2025 (Act No. 24 of 2025), shall come into force. [S.O. 1244(E)]

The Merchant Shipping Act, 2025 received President assent on August 18, 2025 and was published on August 19, 2025. An Act to consolidate and amend the law relating to merchant shipping to ensure compliance with India’s obligation under the maritime treaties and international instruments to which India is a party and also to ensure the development of Indian shipping and efficient maintenance of Indian mercantile marine in a manner best suited to serve the national interest and for matters connected therewith or incidental thereto.

The Merchant Shipping Act, 2025 (Act No. 24 of 2025), is a landmark piece of legislation that marks the most significant overhaul of India’s maritime regulatory framework in nearly seven decades. The Act also repeals the bulky and outdated Merchant Shipping Act of 1958.

The primary objective of the 2025 Act is to move away from a "regulatory-heavy" colonial-era mindset toward an "enabling" policy environment. By condensing 561 sections of the 1958 Act into 16 Parts and 325 Clauses, the new law streamlines governance, enhances the "bankability" of Indian maritime jurisdictions, and aligns domestic law with contemporary international standards set by the International Maritime Organization (IMO).

Background and Necessity for Reform

For years, the 1958 Act was criticized for being fragmented and ill-equipped to handle modern maritime complexities such as containerization, digital documentation, and advanced environmental protocols. India’s ambition to become a global maritime leader—as outlined in the Maritime India Vision 2030 and Amrit Kaal Vision 2047—required a legal foundation that could attract foreign investment and increase Indian-flagged tonnage.

The 2025 Act serves as a "future-ready" framework that prioritizes:

Ease of Doing Business: Reducing bureaucratic hurdles through digitalization.

Global Alignment: Integrating international conventions (SOLAS, MARPOL, MLC, etc.).

National Security: Strengthening jurisdiction over coastal waters and "stateless" vessels.

Sustainability: Enforcing stricter environmental and ship-recycling standards.

Key Provisions and Structural Changes

Modernized Registration and Ownership

One of the most transformative shifts in the 2025 Act is the liberalization of ship ownership. Under the old law, registration was largely restricted to vessels "wholly owned" by Indian citizens or companies.

Expanded Ownership: The new Act allows for partial ownership. Indian-flagged vessels can now be owned by a mix of Indian citizens, companies, Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and registered cooperative societies.

Bareboat Charter-cum-Demise (BCCOD): The Act enables the registration of foreign-flagged vessels under BCCOD contracts with Indian entities. This allows Indian operators to expand their fleets without the massive capital outlay required for outright purchases.

Universal Registration: All vessels, regardless of weight or propulsion (including those under 15 tons previously exempt), must now be registered. This includes modern craft like submersibles and offshore drilling units.

Temporary Registration: To boost the domestic ship-recycling industry, the Act provides for the temporary registration of vessels specifically destined for recycling in India.

Seafarer Welfare and Employment

India is one of the world's largest suppliers of seafarers. The 2025 Act places their welfare at the center of the maritime economy by aligning with the Maritime Labour Convention (MLC), 2006.

Standardized Agreements: The Act mandates clear employment agreements between seafarers and ship owners or recruitment agencies.

Social Security: For the first time, statutory provisions explicitly guarantee access to medical care, social security, and pensions.

Repatriation and Abandonment: The Act introduces a dedicated mechanism for the relief and repatriation of "abandoned seafarers." It empowers the government to replace crews on abandoned vessels (Indian or foreign) to prevent them from becoming hazards in Indian waters.

Training and Certification: The Director-General of Maritime Administration is now empowered to regulate maritime education and training institutes, ensuring that Indian seafarers meet the highest global professional standards.

Digitalization and Transparency

The Act introduces "e-governance" into the shipping sector to eliminate paperwork and reduce corruption.

Electronic Records: The law explicitly recognizes electronic logs, digital certificates, and e-agreements. This paves the way for the adoption of Electronic Bills of Lading (eBLs).

Transparency in Charges: In a first for Indian maritime law, service providers and agents are now required to provide a full disclosure of all shipping-related charges in the transport document. Hidden fees or non-disclosure now carry significant monetary penalties.

Safety, Security, and Environmental Protection

The 2025 Act integrates several international conventions into domestic law to ensure the protection of the Indian coastline and the global marine ecosystem.

Pollution Prevention: It incorporates MARPOL (International Convention for the Prevention of Pollution from Ships) and the Bunker Oil Convention. Every vessel, regardless of size, must now possess pollution prevention certification.

Emergency Response: The Act strengthens the framework for wreck removal (Nairobi Convention) and salvage operations. It defines "abandoned vessels" more broadly—not just physically derelict ships, but those whose owners have failed in their safety or welfare obligations.

Sovereign Enforcement: Drawing from UNCLOS, the Act grants Indian authorities the "right of hot pursuit." The government can pursue and seize foreign vessels on the high seas if they have violated Indian laws within coastal waters. It also allows for the detention of "stateless" vessels found in Indian jurisdiction.

Administrative and Institutional Overhaul

To implement these reforms, the Act redefines the administrative hierarchy:

Director-General of Maritime Administration (DGMA): The former Director-General of Shipping has been redesignated as the DGMA, with expanded powers to oversee maritime security, education, and the implementation of international treaties.

Advisory Boards: The Act maintains the National Shipping Board and the National Welfare Board for Seafarers, ensuring that stakeholders (including MPs, ship owners, and seafarers) have a voice in policy.

Adjudication: To speed up legal processes, the Principal Officer of the Mercantile Marine Department (MMD) is designated as the first-instance adjudicator for penalties, reducing the burden on the judiciary.

Economic and Strategic Impact

The Merchant Shipping Act, 2025, is not just a regulatory document; it is a strategic tool for economic growth.

Boosting Indian Tonnage: By simplifying registration and allowing BCCOD, the government aims to increase the number of ships flying the Indian flag. This reduces the outflow of foreign exchange paid to foreign shipping lines (currently estimated in the billions of dollars).

Ship Recycling Leadership: With 30% of the global market share, India is a leader in ship recycling. The new provisions for temporary registration and environmental safety will help Alang and other yards move toward "green" recycling.

Global Hub Status: By aligning with the Hague-Visby Rules and improving transparency, the Act makes Indian ports more attractive for transshipment, competing with hubs like Singapore and Dubai.

References:

Gazette of India: https://egazette.gov.in/(S(alxv4oy5luni554eyliqcgqv))/ViewPDF.aspx

Gazette of India: https://egazette.gov.in/(S(alxv4oy5luni554eyliqcgqv))/ViewPDF.aspx