India Proposes New Licensing Rules for Foreign Vessels in Coastal and EXIM Trade

By Admin

25 Dec, 2025

India has taken a significant step towards strengthening regulatory oversight in its maritime sector with the release of the Draft Coastal Shipping Licensing of Foreign Vessels Rules, 2026. Issued by the Union Ministry of Ports, Shipping and Waterways under the Coastal Shipping Act, 2025, the proposed rules aim to modernise licensing procedures for foreign-flagged vessels while protecting domestic shipping interests and enhancing ease of doing business.

The draft rules have been published in the Gazette of India and opened for public consultation, signalling the government’s intent to create a transparent and structured framework for foreign vessel operations across coastal, EXIM, global and offshore maritime activities.

Regulatory Coverage and Applicability

Once notified, the rules will apply to all foreign-flagged vessels operating in Indian coastal waters or engaging with Indian ports. This includes vessels involved in coastal trade between Indian ports, import and export voyages, global trade touching Indian ports, and offshore maritime services.

The draft clearly states that foreign vessels will not be permitted to undertake coastal trade in India without a valid licence issued by the Director General of Shipping. This provision reinforces regulatory control and ensures better monitoring of foreign participation in India’s maritime trade.

Licensing Scope and Exemptions

Under the proposed framework, licences will be mandatory for foreign vessels chartered or operated by Indian citizens, non-resident Indians, Indian companies, LLPs, cooperatives or other notified entities. These licences will cover coastal movements, EXIM voyages, global trade operations involving Indian ports and offshore services.

However, an exemption has been proposed for foreign vessels chartered by foreign nationals when operations are conducted entirely outside India and do not involve Indian ports or coastal waters. This distinction ensures that India’s regulatory framework remains focused on activities impacting its maritime jurisdiction.

Digital Licensing Through e-Samudra

In line with the government’s push for digital governance, the draft rules mandate that all licence applications be processed through the e-Samudra portal of the Directorate General of Shipping. Applicants will be required to submit vessel details, charter party agreements, compliance declarations and supporting certificates electronically.

Offline submissions will be allowed only in cases where the portal is unavailable, ensuring efficiency while retaining flexibility during technical disruptions.

Licence Categories and Fee Structure

Licences have been categorised based on both charter type and operational purpose. Categories include voyage charter, time charter and contract of affreightment, along with operational classifications such as export, import, coastal, global and offshore trade.

Any amendment, extension or modification to an existing licence will require a fresh application and payment of applicable fees. Licensing fees will vary depending on the duration and nature of the operation, as detailed in the schedules to the draft rules. A valid licence must be produced before port authorities to obtain port clearance.

Compliance, ROFR and Enforcement Powers

Before granting a licence, the Director General of Shipping will verify compliance with Indian maritime laws, safety and environmental standards, crew nationality norms and the Right of First Refusal mechanism. The ROFR framework prioritises the use of Indian-flagged and Indian-built vessels wherever feasible.

The draft rules empower the DGS to suspend, cancel or modify licences in cases of non-compliance, breach of licence conditions or non-payment of penalties. Provisions for vessel detention under port state control regulations have also been included to strengthen enforcement.

Appeals and Stakeholder Consultation

The draft introduces a structured mechanism for compounding offences and filing appeals against penalties, with standard formats provided in the schedules. This brings greater procedural clarity and legal certainty for operators.

The Central Government has invited objections and suggestions from industry stakeholders within 30 days of the notification’s publication. Feedback may be submitted in writing or via email to the Ministry of Ports, Shipping and Waterways, after which the rules will be finalised.

Conclusion

The Draft Coastal Shipping Licensing of Foreign Vessels Rules, 2026 represent a major policy move towards balancing regulatory discipline with operational flexibility in India’s maritime sector. By digitising processes, strengthening compliance mechanisms and prioritising Indian shipping interests, the proposed framework is expected to bring greater transparency, efficiency and predictability to foreign vessel operations in Indian waters.