RBI eases regulations to boost shipping sector business environment

By Admin

11 Jul, 2025

India's maritime industry just received a significant regulatory boost from the Reserve Bank of India (RBI), signaling a major stride toward enhancing the ease of doing business in the shipping sector. These much-anticipated reforms address long-standing concerns raised by Indian shipowners and maritime service providers, as consistently pursued by the Directorate General of Shipping. The changes mark a crucial shift in India’s maritime policy direction, aligning with global best practices and bolstering competitiveness.

Key Regulatory Changes Introduced by RBI

One of the most notable reforms is the amendment to the Foreign Exchange Management (Export of Goods & Services) Regulations. Traditionally, non-cargo ships such as tugboats, dredgers, and offshore support vessels were required to file an Export Declaration Form (EDF) before leaving Indian waters a process that could take up to 15 days. This made operations cumbersome and less attractive for foreign operators looking to base assets under the Indian flag. Previously, only cargo ships were exempted from this rule.

With the new RBI notification issued in June, tugboats, dredgers, and offshore support vessels have also been exempted from filing the EDF. This move removes a major procedural barrier, streamlining ship mobilization and making Indian registration more viable for international shipping companies.

Advance Remittance Cap Increased to $50 Million

In another pro-business development, the RBI has significantly raised the ceiling for advance remittances on ship imports from $5 million to $50 million. This change eliminates the requirement for a standby letter of credit or bank guarantee, simplifying the financial process and bringing parity with the aviation sector.

This reform is particularly impactful for the acquisition of ships in the second-hand market. Earlier, if an Indian shipowner intended to buy a $60 million vessel and had to pay a 20% deposit, the $5 million cap forced them to negotiate for lower deposits, often resulting in lost opportunities or weakened negotiating power. With the new $50 million cap, Indian buyers are now on stronger footing in global ship transactions.

Impact on the Offshore and Dredging Segments

The offshore vessel and dredging segments stand to benefit immensely. For nearly a decade, stakeholders in these sectors have been lobbying for relaxation in the EDF filing requirements. Many foreign dredging companies previously avoided registering under the Indian flag due to these bureaucratic hassles. The recent notification is a direct response to these concerns and opens the door for more foreign maritime assets to be deployed from Indian bases.

A Strategic Step Forward

These reforms not only ease operational hurdles but also underscore India’s intent to position itself as a maritime hub. With clearer regulations, improved financial facilitation, and a focus on business-friendly policies, the RBI’s actions are expected to attract global players and encourage further investment in the Indian shipping sector.

As India strengthens its role in global trade, such policy momentum combined with strategic maritime positioning reaffirms the nation’s commitment to becoming a leading player in the international shipping and logistics arena.

Conclusion

The RBI’s regulatory reforms are a welcome relief for Indian shipowners and maritime operators. By aligning India’s maritime financial regulations with global standards, simplifying export procedures, and enhancing purchasing power, the government is sending a strong message: India is open for maritime business and ready to lead.