The Coastal Shipping Bill, 2024, introduced in the Lok Sabha, aims to consolidate and amend regulations governing coastal trade to promote domestic participation and strengthen India’s maritime capabilities. Recognizing the potential of India’s 7,500-kilometer coastline, the bill addresses inefficiencies in the existing framework, such as outdated regulations under the Coasting Vessels Act, 1838, and gaps in the Merchant Shipping Act, 1958. Key provisions include repealing Part XIV of the Merchant Shipping Act, introducing licensing for vessels engaged in coastal trade, and establishing a National Database of Coastal Shipping for transparency. Offshore services, non-propelled vessels, and chartered vessels are also brought under regulatory oversight to enhance safety, security, and competitiveness. The bill seeks to create more jobs for Indian seafarers by mandating citizenship-based crew requirements and promoting shipbuilding within the country. Furthermore, it proposes a National Coastal and Inland Shipping Strategic Plan to support the growth of the sector and align with global best practices. Penalties for non-compliance and mechanisms for compounding offences are introduced, alongside empowering authorities like the Director-General of Shipping for enforcement and oversight. The bill emphasizes reducing logistics costs, improving connectivity, and boosting efficiency in the coastal shipping sector while ensuring national security and environmental standards.
AS INTRODUCED IN LOK SABHA
Bill No. 177 of 2024
THE COASTAL SHIPPING BILL, 2024
________
ARRANGEMENT OF CLAUSES
________
CHAPTER I
PRELIMINARY
Bill No. 177 of 2024
AS INTRODUCED IN LOK SABHA
THE COASTAL SHIPPING BILL, 2024
A
BILL
to consolidate and amend the law relating to regulation of coastal shipping, promote coasting trade and encourage domestic participation therein, to ensure that India is equipped with a coastal fleet, owned and operated by the citizens of India for its national security and commercial needs, and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Seventy-fifth Year of the Republic of India as follows:––
CHAPTER I
PRELIMINARY
1. Short title, application and commencement.
(1) This Act may be called the Coastal Shipping Act, 2024.
(2) Save as otherwise provided, the provisions of this Act shall apply to––
(a) every vessel, other than an Indian vessel, engaged in coasting trade, irrespective of the place of residence or domicile of the owner;
(b) every chartered vessel referred to in Chapter IV; and
(c) coastal waters of India.
(3) It shall come into force on such date as the Central Government may, by 5 notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act.
2. Definitions.
(1) In this Act, unless the context otherwise requires,––
(a) “coasting trade” means carriage of goods or passengers by sea from any port or place in India to any other port or place in India, or performing any 10 service within coastal waters but shall not include fishing of any kind.
Explanation.—For the purposes of this clause, “service” includes exploration, exploitation, research, and any other commercial activity in the coastal waters other than carriage of goods or passengers by sea;
(b) “coastal waters” means any part of the territorial waters of India, 15 along with any part of the adjoining maritime zones of India within the meaning of the Territorial Waters, Continental Shelf, Exclusive Economic Zone and Other Maritime Zones Act, 1976, for undertaking coasting trade:
Provided that the Central Government may, by notification, specify any port or place including inland waters of India as part of the coastal waters for the purposes of this Act;
(c) “committee” means the committee constituted under sub-section (3) of section 8 for preparing the National Coastal and Inland Shipping Strategic Plan;
(d) “Director-General” means the Director-General appointed under the Merchant Shipping Act, 1958;
(e) “Indian vessel” means any vessel registered in India under the Merchant Shipping Act, 1958;
(f) “licence” means the licence issued by the Director-General under section 4 or section 11;
(g) “licensee” includes the owner or master or charterer or operator or 30 any person operating the vessel under a licence granted to such vessel by the Director-General;
(h) “National Database of Coastal Shipping” means the database maintained by the Director-General under section 9;
(i) “notification” means a notification published in the Gazette of India 35 or the Official Gazette of a State, as the case may be, and the expression “notify” with its grammatical variation and cognate expressions, shall be construed accordingly;
(j) “prescribed” means prescribed by rules made by the Central Government under this Act;
(k) “principal officer” means the principal officer of the Mercantile Marine Department referred to in the Merchant Shipping Act, 1958;
(l) “proper officer” shall have the meaning assigned to it in clause (34) of section 2 of the Customs Act, 1962;
(m) “Strategic Plan” means the National Coastal and Inland Shipping Strategic Plan published under sub-section (1) of section 8;
(n) “vessel” includes every description of water craft, used or capable of being used in the marine environment, whether self-propelled or not, such as ship, boat, sailing vessel, fishing vessel, submersible, semi-submersible, hydrofoils, non-displacement crafts, amphibious crafts, wing-in-ground crafts, pleasure 50 crafts, barges, lighters, mobile offshore drilling units and mobile offshore units.
(2) Words and expressions used and not defined in this Act but defined in the Merchant Shipping Act, 1958, shall have the meanings respectively assigned to them in that Act.
CHAPTER II
PROHIBITION AND LICENCE FOR COASTING TRADE
3. Prohibition on coasting trade.
(1) No vessel, other than an Indian vessel, shall engage in coasting trade, in the coastal waters, except under a licence granted by the Director-General under section 4:
Provided that the Director-General may, by order in writing, permit a vessel registered under the Inland Vessels Act, 2021, to engage in coasting trade to such extent and subject to such conditions, as may be specified in that order.
(2) Whoever engages any person to undertake coasting trade shall ensure that such person does not violate the provisions of sub-section (1).
4. Licence for coasting trade.
(1) Every application for grant of a licence for coasting trade shall be made to the Director-General in such form, manner and on payment of such fee, as may be prescribed.
(2) Before issuing a licence under this section, the Director-General shall take into consideration the following factors, namely:—
(a) whether the applicant has previously held a licence that was cancelled;
(b) whether the applicant has engaged in violation of any of the provisions of this Act prior to or during the period of pendency of his application;
(c) citizenship of the crew;
(d) build requirements of the vessel;
(e) availability of vessels on the route;
(f) licences granted to vessels for the same route;
(g) safety, national and maritime security concerns;
(h) equipment on board the vessel including communication equipment;
(i) the Strategic Plan under section 8;
(j) cost efficiency of transport;
(k) validity of the certificates of vessel and crew;
(l) validity of the certificate of insurance of the vessel; and
(m) any other requirements as the Director-General may consider necessary in furtherance of the objectives of this Act.
(3) A licence granted under this section shall be in such form, for such period and shall be subject to such conditions, as may be prescribed:
Provided that the Director-General may, for reasons to be recorded in writing, specify such other conditions as may be necessary for grant of the licence.
(4) The class or category of licence to be granted under this section shall be such as may be prescribed.
5. Suspension, revocation or modification of licence.
(1) The Director-General may, if the circumstances of the case so require to meet the objectives of this Act, by order in writing and for reasons to be recorded therein, suspend, revoke or modify a licence granted under section 4, if the licensee, or any person engaged by him––
(a) violates any condition of the licence; or
(b) fails to comply with any requirement under any law for the time being in force applicable to the vessel; or
(c) fails to comply with a direction issued under section 35; or
(d) fails to pay any fine or serve any sentence imposed under this Act:
Provided that the suspension, revocation or modification of licence under this 10 clause shall not absolve the licensee from his obligation for payment of any fine or penalty, or undergoing any punishment, imposed on him under this Act.
(2) No licence granted under section 4 shall be suspended, revoked or modified under sub-section (1), unless the licensee has been given a reasonable opportunity of being heard.
(3) A licensee, who intends to modify the particulars of the licence granted to him under section 4, may make an application to the Director-General in that behalf in such form and manner, as may be prescribed.
(4) Where the licence granted under section 4 ceases to be valid due to expiry of its period or revocation, the licensee shall––
(a) return it or cause it to be returned to the Director-General; and
(b) cease to engage in coasting trade, within such period as may be specified by the Director-General.
6. Reporting requirements.
Every vessel, including Indian vessels engaged in coasting trade, shall report to the Director-General the following information in such form and manner 25 as may be prescribed, namely:––
(a) the port or ports which it will visit in the course of its voyage;
(b) goods or passengers carried by such vessel and the ports or places where such goods or passengers will be dropped off;
(c) any offshore area in which it may operate or navigate for the purposes 30 of its voyage; and
(d) such other information as the Director-General may deem fit.
7. Licence to be produced for port clearance.
(1) No proper officer shall grant clearance to a vessel, other than an Indian vessel, engaging in coasting trade to enter or depart from a port, unless the licensee or agent of such vessel produces the licence granted under section 4.
(2) Where any vessel fails to comply with the requirements of this Act, the Director-General or the principal officer or an officer designated by the Central Government in this behalf may, after giving an opportunity of being heard to the licensee or agent of such vessel, by order in writing and for reasons to be recorded therein, detain that vessel until an order is issued for the release of such vessel.
CHAPTER III
NATIONAL COASTAL AND INLAND SHIPPING STRATEGIC PLAN AND NATIONAL DATABASE OF COASTAL SHIPPING
8. National Coastal and Inland Shipping Strategic Plan.
(1) The Central Government shall, within a period of two years from the date of commencement of this Act, by notification, publish a National Coastal and 45 Inland Shipping Strategic Plan for the purposes of this Act, which shall be updated every two years by a like notification.
(2) The Strategic Plan shall include the following, namely:––
(a) assessment of the condition of coastal shipping routes in India including routes occupied by inland waterways;
(b) identification of the operational improvements required in coastal shipping, including those by way of integration with inland waterway routes,in order to make coastal maritime transport a cost-efficient mode of transportation for goods and passengers;
(c) long term forecasts of traffic on coastal shipping and inland waterways network;
(d) identification of best practices for improving the performance of coastal shipping including the synergy presented by inland waterway routes and other modes of transportation;
(e) identification of new routes for coastal shipping and integration thereof with inland waterways and existing coastal shipping routes;
(f) measures for the promotion of building, registration and participation of Indian vessels in coastal shipping in India;
(g) recommendations regarding the conditions subject to which vessels registered under the Inland Vessels Act, 2021, may engage in coasting trade of India; and
(h) such other matters as may be prescribed.
(3) The Central Government shall constitute a committee consisting of the following members for preparing the Strategic Plan, namely:—
(a) Director-General of Shipping—Chairperson, ex officio;
(b) Chairman, Inland Waterways Authority of India constituted under section 3 of the Inland Waterways Authority of India Act, 1985—Member, ex officio;
(c) one representative of each Board of Major Port Authority constituted under sub-section (1) of section 3 of the Major Port Authority Act, 2021—Members;
(d) one representative of the National Security Council Secretariat—Member;
(e) one representative of each State Maritime Board or any other body responsible for the administration of ports other than major ports, in a State or Union territory—Members;
(f) two representatives to represent ship owners—Members;
(g) two representatives of seafarers—Members; and
(h) such other persons having expertise in the field of coastal trade, mercantile and marine trade or maritime sector, as the Central Government may deem necessary—Members.
(4) The committee shall meet at such time and place, and shall observe such procedure for the transaction of business at its meetings including the quorum at such meetings, as may be prescribed.
(5) The committee shall prepare a draft of the Strategic Plan for consideration 40 and approval of the Central Government and the Central Government shall, after considering the draft Strategic Plan, approve the Plan with or without modifications.
(6) The Central Government shall make available the Strategic Plan on its website for public access.
9. National Database of Coastal Shipping.
(1) The Director-General shall maintain a web portal of a database to be called the National Database of Coastal Shipping in such form and manner as may be prescribed.
(2) The National Database of Coastal Shipping shall contain the following information on coasting trade in India, namely:––
(a) applications received for licence under section 4;
(b) licences granted under section 4;
(c) terms and conditions of the licences so granted;
(d) routes, voyages and services in the coasting trade of India;
(e) requirement of applicants for grant of licences under section 4;
(f) expired and revoked licences under section 5;
(g) information reported to the Director-General under section 6;
(h) such other information as the Director-General may deem fit.
(3) The Director-General shall make available the National Database of Coastal Shipping in electronic form on a web portal for access to the public and it shall be updated every month.
CHAPTER IV
LICENCING OF CHARTERED VESSELS OTHER THAN FOR COASTING TRADE
10. Application of Chapter
This Chapter shall apply to all sea going vessels, chartered by a citizen of India or a non-resident Indian or an overseas citizen of India, or a company or a co-operative society or a limited liability partnership or any other entity as the Central Government may, by notification, specify in this behalf, proceeding to sea from a port or place––
(a) in India, to a port or place outside India; or
(b) outside India, to a port or place in India or outside India.
11. Requirement of licence by chartered vessels.
(1) No vessel, other than an Indian vessel, chartered by a citizen of India or a non-resident Indian or an overseas citizen of India or a company or a co-operative society or a limited liability partnership or any other entity as the 25 Central Government may, by notification specify in this behalf, shall be taken to sea from a port or place within India or outside India, except under a licence granted by the Director-General under this section:
Provided that no vessel which is chartered by an overseas citizen of India shall be required to obtain licence, if such vessel is chartered exclusively for operation outside India.
(2) A licence granted under this section may be––
(a) a general licence; or
(b) a licence for a specified period or voyage.
(3) Every application for grant of licence under this section shall be made to 35 the Director-General in such form, manner and on payment of such fee, as may be prescribed.
(4) A licence granted under this section shall be in such form, for such period and shall be subject to such conditions, as may be prescribed:
Provided that the Director-General may, for reasons to be recorded in writing, 40 specify such other conditions as may be necessary, for grant of the licence under this section.
12. Suspension, revocation or modification of licence granted to chartered vessels.
(1) The Director-General may, at any time, if the circumstances of the case so require, by order in writing and for reasons to be recorded therein, suspend, revoke or modify a licence granted under section 11:
Provided that no such licence shall be suspended, revoked or modified, unless the licensee has been given a reasonable opportunity of being heard.
(2) A licensee, who intends to modify the particulars of the licence granted to him under section 11, may make an application to the Director-General in that behalf in such form and manner, as may be prescribed.
13. Licence granted to chartered vessel to be returned when ceases to be valid.
Where a licence granted under section 11 ceases to be valid due to expiry of its period or revocation, the licensee shall return it or cause it to be returned to the Director-General, within such period as may be specified by the Director-General.
14. No port clearance without production of licence.
No proper officer shall grant port clearance to any vessel requiring a licence under this Chapter, unless the owner, master or agent of the vessel produces a valid licence in respect of such vessel.
CHAPTER V
OFFENCES AND PENALTIES
15. Punishment for participating in coasting trade in contravention of section 3.
Whoever engages in coasting trade in contravention of the provisions of 15 section 3, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to fifteen lakh rupees, or four times the value of all fees or commission or payments received by the owner or charterer of the vessel for the voyage, whichever is greater, or with both, and the vessel shall also be liable for detention under section 29.
16. Punishment for participating in coasting trade after licence ceases to be valid.
Whoever engages in coasting trade in contravention of the provisions of clause (b) of sub-section (4) of section 5, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to ten lakh rupees, or two times the value of all fees or commission or payments received by the licensee of the vessel for all voyages conducted in contravention, whichever is greater, or with both, and the vessel shall also be liable for detention under section 29.
17. Punishment for taking vessel into sea in contravention of section 11.
Whoever takes a vessel to sea in contravention of the provisions of section 11, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to fifteen lakh rupees, or four times the value of all fees or commission or payments received by the owner or charterer of the vessel for the voyage, whichever is greater, or with both, and the vessel shall also be liable for detention under section 29.
18. Punishment for failure to furnish information or furnishing false information after notice.
If any licensee or agent on whom a notice has been served under sub-section (2) of section 35––
(a) fails to furnish the information required within the time specified; or
(b) furnishes any information or makes any statement which the licensee or agent knows to be false on any material particular,
he shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to fifty thousand rupees, or with both, and the vessel shall also be liable for detention under section 29.
19. Punishment for violation of order of detention.
If any vessel in respect of which a notice or order for detention has been served under this Act, proceeds to sea before it is released, the licensee of the vessel in respect of which the contravention has taken place shall be punishable with imprisonment for a term which may extend to six months or with fine which may extend to fifteen lakh rupees, or with both, and the vessel shall also be liable for detention under section 29.
20. Punishment for illegally detaining person authorised to detain vessel.
Where any vessel, after detention, or order for such detention proceeds to sea with any person authorised to detain any vessel on board, before it is released, the licensee or agent of such vessel shall be punishable with imprisonment for a term which may extend to six months or with fine upto one lakh rupees and all expenses of, and incidental to, such person being so taken to sea, or with both, and 5 the vessel shall also be liable for detention under section 29.
21. Penalty for reporting false or misleading information.
If any person who is required to report any information to the Director-General under section 6 fails to do so, or otherwise intentionally reports misleading or false information, such person shall be liable for penalty which may extend to one lakh rupees.
22. Penalty for violation of conditions of licence.
Whoever fails to comply with the conditions of licence granted under section 4 or section 11, shall be liable for penalty which may extend to ten lakh rupees, or two times the value of all fees or commission or payments received by the licensee of the vessel for all voyages conducted in contravention, whichever is greater, or with both, and the vessel shall also be liable for detention under 15 section 29.
23. Penalty for noncompliance of direction of Director General.
Any licensee or agent, who fails to comply with any direction of the Director-General under sub-section (1) of section 35, shall be liable for penalty which may extend to five lakh rupees, or two times the value of all fees or commission or payments received by such licensee or agent for all voyages 20 conducted in contravention of such direction, whichever is greater, and the vessel shall also be liable for detention under section 29.
24. Penalty for noncompliance with order of Central Government
Any licensee or agent, who fails to comply with an order of the Central Government under this Act, shall be liable for penalty of not less than fifteen lakh rupees, and the vessel may also be liable for detention under section 29.
25. General provision for contravention or non-compliance
Whoever contravenes any provision of this Act, or fails to comply with any provision thereof, or of any rule, direction, order or notification made thereunder, for which no punishment or penalty is specially provided in this Act, shall be liable for penalty which may extend to one lakh rupees, and if the breach is a continuing one, with further penalty which may extend to five thousand rupees for 30 every day after the first day during which the breach continues.
26. Compounding of certain offences.
(1) Notwithstanding anything contained in the Bharatiya Nagarik Suraksha Sanhita, 2023, any offence punishable under sections 15 to 20 of this Act, may, before or after the institution of prosecution, be compounded by an officer designated by the Central Government, by notification in this behalf, on payment for credit to the Central Government of such sum and in such manner as may be prescribed:
Provided that such sum shall not, in any case, exceed the maximum amount of the fine which may be imposed under this Act for the offences so compounded:
Provided further that in case of subsequent offence, the same shall not be 40 compounded.
(2) The officer referred to in sub-section (1) shall exercise the powers to compound an offence, subject to the direction, control and supervision of the Central Government.
(3) Every application for the compounding of an offence shall be made in such 45 form and manner as may be prescribed.
(4) Where any offence is compounded before the institution of any prosecution, no prosecution shall be instituted against the offender in relation to whom the offence is so compounded.
(5) Where the compounding of any offence is made after the institution of any prosecution, such composition shall be brought by the officer referred to in sub-section (1), in writing, to the notice of the court in which the prosecution is pending and on such notice for compounding the offence being given, the person against whom the offence is so compounded shall be discharged.
(6) Any person who fails to comply with an order of compounding made by the officer referred to in sub-section (1), shall be liable to pay a sum equivalent to twenty per cent. of the maximum fine provided for the offence, in addition to fine provided for the said offence.
(7) No offence punishable under this Act shall be compounded except in accordance with the provisions of this section.
27. Special provision regarding punishment.
Notwithstanding anything contained in section 23 of the Bharatiya Nagarik Suraksha Sanhita, 2023, it shall be lawful for a Judicial Magistrate of the first class to pass any sentence provided under this Act on any person convicted of an offence 15 under this Act.
28. Offences by companies.
(1) Where an offence under this Act has been committed by a company, every person who, at the time the offence was committed, was in-charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:
Provided that nothing contained in this sub-section shall render any such person liable to any punishment provided in this Act, if such person proves that the offence was committed without his knowledge or that such person exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act has been committed by a company and it is proved that such offence was committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or partner, or other officer of the company, such director, manager, secretary or partner, or other officer shall be deemed to be guilty of that offence and shall also be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” includes a co-operative society, a firm or limited liability partnership firm or other association of individuals; and
(b) “director” in relation to a firm means a partner in the firm.
29. Power to enforce detention of vessel.
Where a vessel is authorised or ordered to be detained under this Act, any commissioned officer of the Indian Navy or Indian Coast Guard, or Police, or any port officer, pilot, harbour master or conservator of port, or the Commissioner of Customs, or any other person authorised under this Act, may detain the vessel under instructions of the principal officer.
30. Adjudicating officer for imposition of penalty, appeal and procedure therefor.
(1) The principal officer shall be the adjudicating officer for the purposes of imposing penalty under sections 21 to 25.
(2) Any person aggrieved by the order of the principal officer imposing the penalty under sub-section (1) may, within a period of thirty days from the date of receipt of such order, prefer an appeal before the Director-General in such form and manner as may be prescribed.
(3) The Director-General shall dispose of an appeal referred to in sub-section (2) within a period of thirty days from the date of receipt of such appeal.
(4) No order shall be passed under this section unless the parties have been given a reasonable opportunity of being heard.
(5) Any penalty imposed under sections 21 to 25 may be compounded for the first contravention by an officer designated by the Central Government by notification in this behalf.
(6) Notwithstanding anything contained in this Act, if a penalty imposed by the principal officer or the Director-General under this Chapter is not deposited, the 5 amount shall be recovered as an arrear of land revenue.
31. Notice in respect of foreign vessel.
If any vessel, other than an Indian vessel, is detained under this Act, or if any proceeding is taken under this Act against the licensee or agent of such vessel, notice shall forthwith be served on the consular office of the country in which such vessel is registered, or nearest to the port where the vessel is for the time being, in 10 such form and manner as may be prescribed, and such notice shall specify the grounds on which the vessel has been detained or the proceedings have been taken.
32. Place of trial and jurisdiction of court.
Any person committing any offence under this Act or any rules made thereunder, may be tried for such offence in any place in which such person may be found, or in any court which the Central Government may, by notification, direct in this behalf, or in any 15 court in which such person might be tried under any other law for time being in force in India.
33. Service of documents.
Where, for the purposes of this Act, any document is to be served on any person, that document may be served,—
(a) in any case by delivering a copy thereof personally to the person to 20 be served, or by leaving the same at his last place of residence, or by post or by such electronic means as the Central Government may, by notification, specify in this behalf;
(b) on the master of a vessel where there is master, or on the person being or appearing to be in command or charge of the vessel, by leaving the same for him on board that vessel; and
(c) on the owner of the vessel where there is no master and the vessel is in India, or if such owner is not in India, on the agent of the owner residing in India, or, where no such agent is known or is found, by affixing at a suitable place on the bridge of the vessel.
CHAPTER VI
ISCELLANEOUS
34. Power to delegate.
(1) The Central Government may, by general or special order, direct that any power, authority or jurisdiction, exercisable by it under or in relation to any of the provisions of this Act, may be exercisable also by the Director-General or such 35 other officer and subject to such conditions as may be specified in the order.
(2) The Director-General may, with the previous approval of the Central Government, by general or special order, direct that any power or authority conferred upon or delegated to, and any duty imposed upon him by or under this Act, may be exercised or discharged also by such officer or authority and subject to 40 such conditions as may be specified in the order.
35. Power of Director General to give directions and seek information.
(1) The Director-General may,––
(a) in the public interest; or
(b) in the interest of Indian shipping; or
(c) in the interest of national defence and maritime security; or 45
(d) for ensuring safety of life at sea and the safety of environment,
by order, direct any vessel for which licence has been granted under this Act, in respect of the following, namely:—
(i) the ports or places, whether within or outside India, to which, and the routes by which, the vessel shall proceed for any particular purpose;
(ii) the diversion of a vessel from one route to another for any particular purpose;
(iii) the classes of passengers or cargo which may be carried in the vessel;
(iv) the order of priority in which passengers or cargo may be taken on or put off the vessel at any port or place, whether within or outside India;
(v) to ban any vessel from entering any port, anchorage or offshore facility in India;
(vi) any other matter which the Director-General may deem necessary.
(2) The Director-General may, by notice, require the licensee or agent of any vessel in respect of which—
(a) licence is granted under this Act; or
(b) any direction is given relating to diversion of a vessel from one route to another for any particular purpose,
to furnish such information as may be considered necessary within such period as may be specified in the said notice, which may include—
(i) the classes of passengers and cargo which the ship is about to carry, or is capable of carrying, or has carried during any specified period; or
(ii) the rates of passenger fares and freight charges applicable to the vessel; or
(iii) any other matter as may be prescribed.
36. Power of Central Government to issue directions
(1) Notwithstanding anything contained in this Act, every person shall, in the discharge of his functions and duties under this Act, be bound by such directions on questions of policy as the Central Government may give to it in writing from time to time.
(2) The decision of the Central Government whether a question is one of policy or not shall be final.
37. Power to exempt.
Notwithstanding anything contained in this Act or any law for the time being in force, the Central Government or, as the case may be, the Director-General with the prior permission of the Central Government, if is of opinion that it is necessary or expedient in the public interest so to do, may, by order in writing and subject to such conditions and for such period as it may think fit, exempt from the provisions of this Act,––
(a) any vessel or class of vessels engaged in coasting trade; or
(b) any class of vessels chartered by a citizen of India or non-resident
Indian or an overseas citizen of India, or a company or a co-operative society or a limited liability partnership or such entities as may be specified by the Central Government under sub-section (1) of section 11.
38. Protection of action taken in good faith.
No suit, prosecution or other legal proceeding shall lie against any person for anything which is in good faith done or intended to be done under this Act.
39. Power of Central Government to make rules.
(1) The Central Government may, subject to the condition of previous publication, make rules for carrying out the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely:—
(a) the form and manner of application for grant of licence to be made to the Director-General and the fee to be paid for the same under sub-section (1) of section 4;
(b) the form, period and the conditions subject to which licence shall be granted under sub-section (3) of section 4;
(c) the class or category of licence to be granted under sub-section (4) of section 4;
(d) the form and manner of making application for modification of particulars of a licence to be made to the Director-General under sub-section (3) of section 5;
(e) the form and manner of reporting the requirements to the Director-General under section 6;
(f) such other matters to be included in the Strategic Plan under clause (h) of sub-section (2) of section 8;
(g) the time, place and the procedure to be observed by the committee for the transaction of business at its meetings and the quorum at such meetings under sub-section (4) of section 8;
(h) the form and manner of maintaining the National Database of Coastal Shipping by the Director-General under sub-section (1) of section 9;
(i) the form and manner of application for grant of licence to be made to the Director-General and the fee to be paid under sub-section (3) of section 11;
(j) the form, period and the conditions subject to which licence shall be 15 granted under sub-section (4) of section 11;
(k) the form and manner of making application for modification of particulars of a licence under sub-section (2) of section 12;
(l) the sum to be paid for credit to the Central Government for compounding an offence and the manner of making the payment under sub-section (1) of section 26; 20
(m) the form and manner of making an application for the compounding of an offence under sub-section (3) of section 26;
(n) the form and manner of preferring appeal to the Director-General under sub-section (2) of section 30;
(o) the form and manner of issuance of notice under section 31;
(p) any other matters in respect of which the Director-General may, by notice, require the owner, master or agent of any vessel to furnish information under clause (iii) of sub-section (2) of section 35;
(q) any other matter which is required to be or may be prescribed for carrying out the provisions of this Act.
40. Laying of rules and notifications before Parliament.
Every rule made and every notification issued under this Act shall be laid, as soon as may be after it is made or issued, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses 35 agree in making any modification in the rule or notification or both Houses agree that the rule or notification should not be made or issued, the rule or notification shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or notification.
41. Power to remove difficulties.
(1) If any difficulty arises in giving effect to the provisions of this Act, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may be necessary or expedient for removing the difficulty:
Provided that no such order shall be made under this section after the expiry 45 of three years from the date of commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be after it is made, before each House of Parliament.
42. Repeal and savings.
(1) Part XIV of the Merchant Shipping Act, 1958 (herein referred to as Part XIV of the said Act), except section 411A thereof, is hereby repealed.
(2) Notwithstanding such repeal,––
(a) any notification, rule, regulation, bye-law, order or exemption made, issued or granted under Part XIV of the said Act shall, until revoked, have effect as if it had been made, issued or granted under the provisions of this Act;
(b) any licence granted or issued under Part XIV of the said Act shall, until it is revoked or expires, have effect as if it had been issued or granted under the provisions of this Act;
(c) any office established or created, officer or person appointed and any body elected or constituted under Part XIV of the said Act shall continue and shall be deemed to have been established, created, appointed, elected, or constituted, as the case may be, under this Act;
(d) any document referring to Part XIV of the said Act shall be construed as referring to this Act;
(e) any fine levied under Part XIV of the said Act may be recovered as if it had been levied under this Act;
(f) any offence committed under Part XIV of the said Act may be prosecuted and punished as if it had been committed under this Act;
(g) any proceeding pending before any court under Part XIV of the said Act may be tried or disposed of under the corresponding provisions of this Act;
(h) any inspection, investigation or inquiry ordered to be done under the provisions of Part XIV of the said Act, shall continue to be proceeded with as if such inspection, investigation or inquiry is ordered to be done under the corresponding provisions of this Act.
(3) Without prejudice to the provisions of sub-section (2), the provisions of section 6 of the General Clauses Act, 1897 shall apply with regard to the effect of 30 repeal.
STATEMENT OF OBJECTS AND REASONS
Coastal shipping in India holds great potential owing to vast coastline of around 7500 kilometers and proximity to important global shipping routes. It has been recognised that maritime transportation, particularly coastal shipping is cheaper compared to other modes of transportation. There is a need to improve transport connectivity and supporting infrastructure in the coastal maritime transport sector. The cost of transportation and logistics directly impacts the production cost and there has been a concerted policy effort to improve efficiencies in this regard.
2. The regulation of the coastal maritime sector in India lacks uniformity. Non-mechanised vessels engaged in coastwise trade are governed by the Coasting Vessels Act, 1838 which only provides for registration of such vessels. The measures pertaining to regulation, safety, security and pollution prevention also need to be addressed. The mechanised vessels on the other hand fall under the purview of the Merchant Shipping Act, 1958.
3. The present regulatory framework under Part XIV of the Merchant Shipping Act, 1958, requires Indian ship as well as ships chartered by Indian citizens and foreign vessels to obtain licence before taking ship to sea, including for coasting trade. However, the licencing requirement for all vessels including Indian vessels and exclusion of foreign flag non-propelled vessels from the coasting trade has proven to be a hindrance to competition and efficiency of the sector. It is felt necessary to bring foreign flag non-propelled mobile offshore drilling units, accommodation barges, etc., also within the purview of the regulatory requirements.
4. In view of the challenges arising in the regulation of coasting trade, it is considered necessary to strengthen the regulation of vessels engaged in coasting trade by adopting the best global practices, to meet the present and future requirements of the maritime coastal shipping sector.
5. The Coastal Shipping Bill, 2024, inter alia, seeks to provide for the following, namely:—
(i) to repeal Part XIV of the Merchant Shipping Act, 1958 relating to control of Indian ships and ships engaged in coasting trade (except section 411A thereof);
(ii) to include the term “service” in the definition of “coasting trade” so as to bring offshore vessels which generally provide services without engaging in transportation of goods and passengers, within the ambit of the Bill;
(iii) prohibition of coasting trade in the coastal water without licence by vessels other than Indian vessels and permitting Inland vessels to engage in coastal trading subject to certain conditions;
(iv) empowering the Director-General to issue licence after taking into consideration certain factors including citizenship of the crew and building requirements of the vessel so as to create more jobs for Indian seafarers and to promote ship building in India;
(v) requirement of licence by vessels chartered by Indian entities for purposes other than coasting trade;
(vi) creation of a National Database of Coastal Shipping so as to ensure transparency of procedure and aid in information sharing;
(vii) preparation of a National Coastal and Inland Shipping Strategic Plan for development, growth and promotion of coastal shipping;
(viii) provision for compounding of certain offences and imposition of penalty by the principal officer; and
(ix) provision for empowering the Director-General to call for information in respect of certain matters.
6. The Notes on clauses explain in detail the various provisions contained in the Bill.
7. The Bill seeks to achieve the above objectives.
SARBANANDA SONOWAL.
NEW DELHI;
The 24th November, 2024.
Notes on Clauses
Clause 1.—This clause provides for the short title, application, and commencement of the Bill. It specifies that the Bill applies to, (a) every vessel, other than an Indian vessel, engaged in coasting trade, (b) chartered vessels as specified under the Bill and (c) the coastal waters of India.
Clause 2.—This clause defines the various expressions used in the Bill, including, “coasting trade”, “coastal waters”, “National Database of Coastal Shipping”, “vessel”, etc.
Clause 3.—This clause prohibits the engagement of vessels, other than Indian vessels, in coasting trade in the coastal waters, unless the licence for the same has been granted by the Director-General of Shipping.
Clause 4.—This clause provides that the Director-General may grant licence to a vessel, for engaging in coasting trade subject to conditions prescribed by rules made by the Central Government. It further provides for prescription of class or categories of licence to be granted.
Clause 5.—This clause provides for the powers of the Director-General to suspend, revoke or modify a licence granted under the Bill. It further provides for modification of a licence, and the return of licences that have ceased to be valid.
Clause 6.—This clause provides for the reporting requirements in relation to every vessel engaged in coasting trade.
Clause 7.—This clause provides that no proper officer of customs shall grant clearance to a vessel, other than an Indian vessel, engaged in coasting trade to enter or depart from a port, unless a licence is produced by the licensee or agent of such a vessel. It further provides for the detention of a vessel which fails to comply with the requirements of the Bill.
Clause 8.—This clause provides for the preparation and publication of a National Coastal and Inland Shipping Strategic Plan. It enumerates the matters to be provided for in such Plan and specifies the composition of the committee for preparing the Plan.
Clause 9.—This clause requires the Director-General to maintain a web portal of a database to be called the National Database of Coastal Shipping. It also enumerates the information to be contained in such a database and provides that the web portal of the said database is to be made available for public access which shall be updated every month.
Clause 10.—This clause provides for the application of Chapter IV of the Bill to sea going vessels chartered by a citizen of India, or a non-resident Indian or an overseas citizen of India, or a company or a co-operative society or a limited liability partnership or any other entity that may be specified by the Central Government.
Clause 11.—This clause provides for the requirement of licensing for chartered vessels other than Indian vessels. It further specifies that a vessel chartered by an overseas citizen of India shall not require a licence under this clause if it is chartered exclusively for operation outside India.
Clause 12.—This clause empowers the Director-General, if required, to suspend, revoke or modify a licence granted under clause 11. It further provides that no licence can be suspended, revoked or modified unless a licensee has been given reasonable opportunity to be heard. It also lays down the procedure for modification of license to be prescribed by rules.
Clause 13.—This clause requires the licensee to upon such licence ceasing to be valid due to expiration or revocation, return the licence to the Director-General.
Clause 14.—This clause prohibits any proper officer of customs to grant a port clearance to a vessel without the production of a licence required under Chapter IV.
Clause 15.—This clause provides for punishment for anyone who participates in coasting trade in contravention of provisions of clause 3.
Clause 16.—This clause provides for punishment for anyone who participates in coasting trade after the license ceases to be valid.
Clause 17.—This clause provides for punishment for anyone who takes a vessel to sea in contravention of the requirement of licensing for chartered vessels under clause 11.
Clause 18.—This clause provides for punishment for a licensee or agent on whom a notice has been served and who fails to furnish the information required within the time specified or furnishes false information.
Clause 19.—This clause provides for punishment for the licensee of a vessel on whom any notice or order for detention has been served if such licensee proceeds to sea before it is released by an authority.
Clause 20.—This clause provides for punishment for the licensee or an agent for illegally detaining a person authorised to detain the vessel and for proceeding to sea before the vessel is released by the authorised officer.
Clause 21.—This clause provides for penalty for reporting misleading or false information to the Director-General under clause 6.
Clause 22.—This clause provides for penalty for failure to comply with the conditions of licence granted under the Bill.
Clause 23.—This clause provides for penalty for a licensee or agent of a vessel, who fails to comply with the directions given by the Director-General.
Clause 24.—This clause provides for penalty for non-compliance with the order of the Central Government by a licensee or agent of a vessel.
Clause 25.—This clause provides for penalty for contravention of any provision of the Bill or failure to comply with any rule, direction, order or notification for which no penalty is specially provided under the Bill.
Clause 26.—This clause provides for compounding of certain offences under the Bill by an officer designated by the Central Government. It further specifies the consequence of non-compliance with an order of the said officer. It also provides that no compounding shall be permissible for a subsequent offence.
Clause 27.—This clause empowers the Judicial Magistrate of the first class to pass a sentence specified under the Bill on any person convicted for an offence under the Bill.
Clause 28.—This clause deems a person in-charge of and responsible for a company to be guilty of and punished for an offence committed by such company subject to the proviso of the clause. It further deems the director, manager, secretary or partner or other officer of the company to be guilty and punished, if such offence was committed with the consent of or due to any neglect of such person.
Clause 29.—This clause empowers any commissioned officer of the Indian Navy or Indian Coast Guard or Police, or any Port Officer, Pilot, Harbour Master or Conservator of port, or the Commissioner of Customs, or any other person authorised under the Bill, to detain a vessel authorised or ordered to be detained under instructions of the principal officer.
Clause 30.—This clause specifies that the principal officer shall be the adjudicating authority for imposition of penalties under the Bill. The clause also provides for a person aggrieved by the order for imposition of penalty to prefer an appeal with the Director-General. It further provides for compounding of certain offences for which penalty is specified under the Bill and specifies that penalty not deposited shall be recovered through an arrear of land revenue.
Clause 31.—This clause provides for serving of notice on the consular office of the country in which a vessel is registered, if such vessel is detained under the Bill or if any proceeding is taken against the licensee or agent of such vessel.
Clause 32.—This clause specifies that any person committing any offence under the Bill may be tried at a place in which he may be found, or in any court which the Central Government may, by notification, direct in this behalf, or in any court in which the person might be tried under any other law for time being in force.
Clause 33.—This clause specifies the manner of service of documents on the concerned person or on the master of the vessel or on the person in command of the vessel or on the owner of the vessel or on the agent of the owner.
Clause 34.—This clause empowers the Central Government to delegate its power, authority, or jurisdiction, under the Bill to the Director-General or any other officer subject to conditions specified in the order issued in that behalf. The clause also empowers the Director-General with previous approval of the Central Government to delegate his powers to any other officer or authority subject to conditions specified in the order.
Clause 35.—This clause provides for the power of the Director-General to give directions for matters specified under the clause to vessels granted licence under the Bill, if considered necessary in public interest or any other interest specified in the clause. It further empowers the Director-General to seek information which may include matters specified under the clause, from the licensee or agent of vessel granted licence under the Bill.
Clause 36.—This clause empowers the Central Government to issue directions with respect to the functions and duties of any person under the Bill and it also specifies that the decision of the Central Government on a question of policy or otherwise shall be final.
Clause 37.—This clause empowers the Central Government or the Director-General to exempt any vessel or class of vessels engaged in coasting trade or any class of vessels chartered by a citizen of India or a non-resident Indian or an overseas citizen of India or a company or cooperative society or a limited liability partnership from the provisions of the Bill for a specific period and subject to conditions as may be deemed fit, if such exemption is considered necessary in the public interest.
Clause 38.—This clause provides for protection of persons from prosecution or legal proceedings for actions done in good faith under the provisions of the Bill.
Clause 39.—This clause enumerates the provisions of the Bill for which the Central Government may make rules.
Clause 40.—This clause specifies that every rule made and notification issued under the Bill shall be laid before each House of Parliament.
Clause 41.—This clause provides that if any difficulty arises in giving effect to the provisions of the Bill, the Central Government may make provisions not inconsistent with the provisions of the Bill, which appear to it to be necessary, for removing such difficulty within a period of three years from the date of commencement of the Bill.
Clause 42.—This clause provides for the repeal of Part XIV of the Merchant Shipping Act, 1958, except for section 411A thereof, and provides for saving certain actions taken under the provisions of the enactment.
FINANCIAL MEMORANDUM
The provisions of the Bill will not involve any expenditure of recurring or non-recurring nature from the Consolidated Fund of India.
MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 39 of the Bill seeks to empower the Central Government to make rules to carry out the provisions of the Bill. Sub-clause (2) of the said clause specifies the matters in respect of which rules may be made. These matters include—
(i) the form and manner of application for the grant of licence and the fee to be paid for the same under sub-clause (1), the form, period and the conditions of licence granted under sub-clause (3), and the class or category of licence to be granted under sub-clause (4) of clause 4; (ii) the form and manner of making application for modification of particulars of a licence under sub-clause (3) of clause 5; (iii) the form and manner of reporting the requirements to the Director-General under clause 6; (iv) other matters to be included in the National Coastal and Inland Shipping Strategic Plan under sub-clause (2)(h) of clause 8; (v) the time, place and the procedure to be observed by the committee for the transaction of business at its meetings and the quorum at such meetings under sub-clause (4) of clause 8; (vi) the form and manner of the National Database of Coastal Shipping to be maintained by the Director-General under sub-clause (1) of clause 9; (vii) the form and manner of application for the grant of licence and the fee to be paid for the same under sub-clause (3) of clause 11; (viii) the form, period and the conditions subject to which licence shall be granted under sub-clause (4) of clause 11; (ix) the form and manner of making application for modification of particulars of a licence under sub-clause (2) of clause 12; (x) the sum to be paid for credit to the Central Government for compounding an offence and the manner of making the payment under sub-clause (1) of clause 26; (xi) the form and manner of making an application for the compounding of an offence under sub-clause (3) of clause 26; (xii) the form and manner of preferring appeal to the Director-General under sub-clause (2) of clause 30; (xiii) the form and manner of issuance of notice under clause 31; (xiv) any other matters in respect of which the Director-General may, require the owner, master or agent of any vessel to furnish information under sub-clause (2)(iii) of clause 35; and (xv) any other matter which is required to be, or may be, prescribed for carrying out the provisions of the Bill.
2. The matters in respect of which the aforementioned rules may be made are matters of procedure and administrative details, and as such, it is not practicable to provide for them in the Bill itself. The delegation of legislative power is, therefore, of a normal character.
LOK SABHA
____________
A
BILL
to consolidate and amend the law relating to regulation of coastal shipping, promote coasting trade and encourage domestic participation therein, to ensure that India is equipped with a coastal fleet, owned and operated by the citizens of India for its national security and commercial needs, and for matters connected therewith or incidental thereto.
____________
(Shri Sarbananda Sonowal, Minister of Ports, Shipping and Waterways)
