Context

·       The passage of the Indian Ports Bill, 2025, in the Rajya Sabha marks a pivotal moment in India’s maritime governance. Alongside this, the enactment of the Coastal Shipping Act, 2025, the Carriage of Goods by Sea Bill, 2025, and the Merchant Shipping Act, 2025, forms a comprehensive legislative package intended to modernize India’s maritime regulatory framework. These new laws aim to replace outdated provisions with standards more in line with international practices, reflecting the evolving global shipping industry.

·       The government has praised these reforms for streamlining governance and enhancing India’s competitiveness on the global stage. However, a closer examination reveals significant concerns that the reforms could centralize authority excessively, erode the federal structure, and impose disproportionate burdens on smaller operators, ultimately undermining the long-term success of these initiatives.

The Indian Ports Act, 2025: Modernizing Maritime Law

·       India’s maritime laws have long lagged behind the rapidly changing global landscape, with foundational statutes like the Indian Ports Act of 1908 and the Merchant Shipping Act of 1958 failing to reflect contemporary realities. The new legislative framework attempts to bridge this gap by aligning India’s maritime governance with international conventions, modern financing mechanisms, and global liability standards.

·       Proponents argue that the Indian Ports Bill, in particular, is designed to enhance ease of doing business, encourage sustainable port development, and bring coherence to a previously fragmented regulatory environment. These efforts are crucial for India’s aspirations to broaden its trade relations, attract foreign investment, and elevate its standing in the global maritime community.

Critical Examination of the Ports Act 2025

·       One of the most controversial aspects of the Ports Act is the creation of the Maritime State Development Council, chaired by the Union Minister of Ports. This body holds the power to compel States to follow centrally issued guidelines. Though framed as a tool for cooperative federalism, critics argue it serves as an instrument of central dominance, pressuring coastal States to prioritize central projects such as Sagarmala and PM Gati Shakti over their own regional concerns.

·       This development threatens to curtail the fiscal autonomy and operational flexibility of States while saddling them with the on-the-ground responsibilities of port management. Essentially, the legislation consolidates control in New Delhi, undermining the federal principles enshrined in India’s Constitution.

·       Another alarming feature is the expansion of discretionary powers coupled with the restriction of judicial oversight. Clause 17 of the Ports Bill excludes civil courts from adjudicating port-related disputes, instead directing conflicts to internal resolution mechanisms controlled by the very authorities whose decisions are being challenged. Such an arrangement risks compromising impartiality and could deter private investment, which thrives on transparent and independent dispute resolution.

·       More broadly, the bills grant vague and expansive regulatory powers that open the door to arbitrary enforcement. Smaller operators are likely to bear the brunt of increased compliance requirements, facing heavier burdens without sufficient support.

Additional Concerns within the Maritime Reform Package

·       The Merchant Shipping Act, 2025, while advancing registration norms, safety protocols, and liability frameworks, introduces significant uncertainties regarding ownership safeguards. Whereas the earlier legislation mandated full Indian ownership of vessels registered under the Indian flag, the new Act allows partial foreign ownership, with exact thresholds to be determined by government notification.

·       This ambiguity endows the executive with excessive discretion and raises fears that India could evolve into a flag-of-convenience jurisdiction, where foreign entities effectively control Indian-registered ships. Moreover, the provisions allowing Bareboat Charter-Cum-Demise registrations, although valid in principle, risk ceding long-term operational control to foreign lessors without clear enforcement mechanisms.

·       Similarly, the Coastal Shipping Act, 2025, embodies tensions between protecting domestic cabotage and expanding central oversight. While it formally reserves coastal trade for Indian-flagged vessels, it empowers the Director General of Shipping to grant licenses to foreign vessels on broad grounds such as national security or strategic considerations. The absence of clear definitions for these criteria invites potential misuse, threatening the interests of domestic operators.

·       Smaller stakeholders, especially those in the fishing sector, may find themselves disproportionately impacted by onerous reporting requirements and bureaucratic hurdles, often without adequate guidance or relief.

The Path Forward: Reforming the Reforms

·       Together, these four laws represent an important acknowledgment of the necessity to update India’s maritime governance. Yet, their heavy reliance on executive discretion, centralization of power, and insufficient protections for judicial independence and small operators threaten to undermine the reforms’ intended benefits.

·       India requires a legal framework that promotes maritime growth while safeguarding the federal balance and ensuring fair competition. Ownership thresholds and licensing criteria must be explicitly codified in legislation, rather than left to administrative notifications subject to executive whim.

·       Dispute resolution systems need to incorporate independent judicial oversight, and States must have a meaningful participatory role in maritime planning and decision-making.

Conclusion

India’s maritime reform package of 2025 is a bold attempt to overhaul century-old laws and align the country with international maritime standards, aiming to propel it into the league of modern maritime powers. However, the risks of excessive centralization, unchecked executive authority, and inadequate safeguards for smaller operators are serious and cannot be ignored.

For these reforms to truly lay the foundation for India’s maritime future, they must be implemented inclusively, transparently, and with a firm respect for the principles of federalism. Only then can India’s maritime sector realize its full potential while maintaining democratic governance and equitable growth.