India Overhauls Shipping Norms to Boost Maritime Fleet, Easing Registration Requirements

New Delhi: In a significant move to bolster the nation’s maritime capabilities, the Centre has introduced liberalized norms for ship registration. Under the newly enacted Merchant Shipping Act, 2025, published in the Gazette of India on November 12, the government has moved away from the stringent “wholly owned” requirement that has defined Indian shipping for decades.

The amendment to Section 15(1) of the Act now permits vessels to qualify for Indian registration if they are majority-owned by Indian citizens or other eligible domestic entities. Under the revised framework, a ship is considered to consist of 100 whole shares. To secure the Indian flag, an eligible owner must hold at least 51 of these shares, a departure from the 1958 Act, which necessitated 100 percent ownership by Indian citizens, companies, or co-operative societies.

Strategic Fleet Expansion

This policy shift is a cornerstone of the National Shipping Board’s (NSB) ambitious strategy to expand the national commercial fleet. Currently, India operates approximately 1,600 vessels, and the NSB—a statutory advisory body under the Ministry of Ports, Shipping and Waterways—has set a target to add 100 additional ships over the next five years.

The push for this reform originated during the inaugural Sagar Samvad (Oceans Dialogue) held in August. Industry experts and officials at the event highlighted a persistent cost disadvantage, noting that operating a ship under the Indian flag remains 16–20 percent more expensive than utilizing foreign flags. Despite these higher operational costs, Indian shipowners are often mandated to match foreign freight rates to secure government contracts via the Right of First Refusal (RoFR) mechanism.

To address this, the NSB proposed a comprehensive five-pillar reform roadmap. By easing registration requirements, the government is looking to encourage “Indian flagging,” thereby making it more attractive for shipowners to register their assets domestically as part of a broader effort to improve the ease of doing business and access to competitive financing.

Eligibility and Compliance

The new regulations expand the definition of “eligible owners” to include Indian citizens, Non-Resident Indians (NRIs), and Overseas Citizens of India (OCIs). Companies, cooperative societies, and limited liability partnerships are also eligible, provided their principal place of business or registered office is located within India.

For cases where NRIs or OCIs maintain a majority interest in a vessel, the law mandates the appointment of an authorized representative. This individual must be an Indian citizen residing in the country or a corporate entity incorporated in India. However, the notification clarifies that vessels wholly owned by an OCI are exempt from the requirement of compulsory Indian registration.

The government’s shift reflects a pragmatic approach to maritime growth, acknowledging that rigid ownership structures may have hindered the expansion of the national fleet in a globally competitive environment. With these regulatory hurdles lowered, the Ministry aims to foster a more dynamic, home-grown shipping industry that can better support India’s growing trade volumes and maritime self-reliance.

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