Following our article on the recently introduced key pieces of maritime legislation in India, focusing on coastal shipping, the carriage of goods by sea, and bills of lading, which have been enacted, we now turn our attention to the most important of all, the Merchant Shipping Act, 2025 (‘2025 Act’) enacted as on August 2025 and to be implemented from the date of notification by the Central Government. This ambitious legislation aims to bring India's maritime laws into the 21st century, creating a more streamlined and efficient regulatory framework for the sector. While the other bills addressed specific aspects of maritime activity, this 2025 Act takes a broader view, seeking to harmonize and modernize the various laws that govern India's shipping industry.
- Broadening the applicability of the Act:
The 2025 Act considerably broadens the scope of regulations to include a wider range of vessels. While the existing Merchant Shipping Act, 1958 (‘MSA’) is limited to sea-going ships equipped with mechanical propulsion, the new 2025 Act extends its application. Once implemented, all sea-going vessels will fall within the 2025 Act’s regulatory framework. This includes non-motorized vessels such as rowboats, canoes, and traditional sailing ships powered primarily by wind, which were previously excluded.
- Ownership of Vessels:
Previously, vessel ownership was restricted to Indian citizens, companies, and cooperatives. The new 2025 Act significantly broadens the ownership scope to include Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and other entities or individuals as may be notified by the Central Government. This increased flexibility aims to attract foreign investment and promote the growth of the maritime sector, thus increasing the Indian tonnage. The MSA does not specify any ownership proportions or makes any provisions for introducing Foreign Direct Investment, which is present in the 2025 Act. This allows for various co-ownership scenarios, providing greater flexibility in vessel ownership arrangements. The 2025 Act also clarifies that it will not be mandatory for vessels wholly owned by OCIs to register in India.
- Registration of Indian chartered foreign vessels.
Under Section 16 of the 2025 Act, a foreign vessel chartered on a bareboat charter cum demise by an Indian charterer may be registered as an Indian vessel. This intends to expand opportunities for international trade and increase Indian tonnage. By allowing Indian entities to register foreign vessels, they can potentially access new markets and participate more actively in global trade. This measure could contribute to an increase in the overall tonnage of vessels under Indian control, enhancing India's maritime presence and competitiveness.
- Temporary registration of vessels
Part III of the 2025 Act introduces provisions for the temporary registration of vessels intended for recycling in India and the granting of provisional certificates of registration to Indian vessels. Unlike the MSA, which did not have similar provisions, the 2025 Act provides a more comprehensive framework for vessel registration and recycling. This includes allowing for the temporary registration of any vessel, whether currently registered or not, under specific conditions outlined in the 2025 Act and its associated rules, aligning with the Recycling of Ships Act, 2019.
- Maritime Education and Training
While the 2025 Act retains the requirement of certain officers on Indian vessels to be duly certified, it also introduces a dedicated Part IV focused on Maritime Education and Training. This represents a notable shift from the MSA, which did not include a section specifically addressing education and training. The new 2025 Act mandates specific certifications for seafarers, outlining rigorous training and examination standards. It also empowers the government to recognize foreign certifications and impose service obligations on certain certificate holders. This comprehensive framework for maritime education and training is a significant departure from the MSA. The 2025 Act also permits following persons to enter into Seafarer Agreement, which was previously only limited to the Master of the vessel: (i) owner of Indian vessel, and (ii) recruitment and placement service agencies for Indian or foreign vessels.
- Maritime Labour Convention Regulations
Section 78 of the 2025 Act takes a broader and more modern approach to implementing the Maritime Labour Convention compared to Section 218A of the MSA. The MSA focuses on specific areas like the hours of work and rest, medical standards, and certification, with a requirement to consult representatives of employers and seafarers. In contrast, the 2025 Act takes a broader approach, addressing a wider range of issues such as training, wages, social security, and skill development. It encompasses both mandatory and optional provisions of the Maritime Labour Convention while streamlining the rule-making process. By granting the Central Government greater flexibility, the 2025 Act aims to establish a more comprehensive and inclusive framework for maritime labour.
The MSA lacks provisions for the welfare of seafarers; however, the 2025 Act marks a transformative step by extending welfare measures to Indian seafarers serving on foreign-flagged ships. It further aspires to uphold the protections and benefits enshrined in the Maritime Labour Convention for all Indian seafarers. By doing so, it ensures enhanced working conditions, elevated safety standards, and robust support systems for those driving the global maritime industry forward.
- Pollution Prevention Standards
Section 87 of the MSA is primarily focused on the certification and qualifications of marine officers, emphasizing areas such as competency exams and endorsements, with minimal attention to environmental concerns. In contrast, the 2025 Act adopts a more modern perspective by introducing clear measures to prevent pollution. These include managing pollution risks, reporting incidents, and ensuring compliance with international environmental standards. The 2025 Act fully integrates the International Maritime Organization's (IMO) conventions for preventing and combating marine pollution, aligning India’s maritime regulatory framework with international standards. While the MSA mandated pollution prevention certificates only for specific vessels, such as (i) oil tankers of at least 150 gross tons and (ii) other vessels of at least 400 gross tons, the 2025 Act extends this requirement to all vessels, regardless of tonnage. While this may lead to slight increase in compliance costs for small operators.
- Survey, Audit and Certification
The 2025 Act introduces an important new section (Part VIII) on Survey, Audit, and Certification, which is vaguely and sporadically described in the MSA. This new part ensures that every Indian vessel, company, or port must be regularly surveyed, audited, or certified to make sure they meet international standards, especially when it comes to safety and environmental protection. Surveyors, who are appointed by the Director-General, will inspect vessels and ports to confirm compliance and issue necessary certificates. If any changes or issues arise after certification, the government can require a re-survey or even revoke certificates. This added focus on oversight and certification ensures that India keeps up with global maritime regulations and maintains high safety and environmental standards, which were less emphasized in the older law.
- Maritime Liability and Compensation
The new 2025 Act focuses on maritime liability and compensation (Part IX), particularly when it comes to claims resulting from vessel collisions or accidents at sea. These accidents often lead to significant damage or loss, whether to the vessel, cargo, or other property. To address this, the 2025 Act introduces a limitation of liability, meaning the amount a shipowner or operator has to pay for certain types of damage is capped. This ensures that the financial burden doesn't become overwhelming. The 2025 Act also sets up a limitation fund, a reserve designed to handle claims and make sure victims of maritime accidents receive fair compensation. These changes are an important update to older laws and bring India closer to international standards for handling maritime claims.
- Safety and Security
Part VI of the 2025 Act, introduces key measures to improve how we respond to marine incidents and emergencies, ensuring that help is timely and effective when accidents happen at sea. It also sets out processes for investigating marine casualties, to learn from them and prevent future occurrences. The 2025 Act includes provisions for wreck and salvage operations, aiming to minimize damage to lives, the environment, and cargo during such events. It places a strong emphasis on safety, security, and pollution prevention for all vessels, including smaller boats, fishing vessels, and those with a net tonnage under 15 tons engaged in coasting trade within India. It also introduces mandatory insurance requirements for these vessels, enhancing their preparedness to manage risks while safeguarding both the crew and the marine environment. These provisions reflect a robust commitment to fostering safe and sustainable maritime operations in India.
- Offences and penalties
While Part XIV of the 2025 Act retains several offences punishable with imprisonment, fine, or both, like: (i) concealment of nationality of the vessel, (ii) misconduct of a seafarer endangering life or vessel, and (iii) taking a vessel to sea without required certified persons; it also increases fines for these offences.
The 2025 Act also introduces significant changes to the treatment of offences, decriminalizing certain actions such as: (i) sending an unseaworthy vessel to sea, and (ii) failing to comply with the directives of the Director-General. At the same time, it establishes new offences to address modern challenges. These include: (i) operating unlicensed recruitment agencies, punishable by imprisonment, fines, or both, and (ii) discharging harmful pollutants into the sea, which attracts a civil penalty. These changes reflect a balanced approach to enforcement, combining decriminalization with accountability for emerging issues.
- Other Changes and Additions
The new 2025 Act gives the Central Government the authority to instruct port authorities, State Maritime Boards or other relevant agencies to assist in dealing with abandoned vessels located near the coast or within India's coastal waters. It also empowers the principal officer to take action against vessels that are unsafe and pose a threat to life or the environment.
The 2025 Act also renames the office of the Director General of Shipping to Director General of Maritime Administration. The 2025 Act empowers the Director-General to regulate maritime education and training. This includes powers to approve training institutes and courses. Further, administratively, many functions under the MSA, which were reserved for the Central Government have been delegated to the Director General to ensure seamless and smooth implementation of the 2025 Act once enacted.
It is pertinent to note that while many provisions of the 2025 Act were already present in the MSA, the 2025 Act entails to restructure and streamline them. Further, many new additions like, requirement of pollution certificate for a larger number of vessels, increased benefits to seafarers will ensure that the 2025 Act, once enacted shall bring India at par with international standards.
Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Authors:
Mustafa Motiwala, Senior Partner
Nihalahmed Shaikh, Associate Partner