Merchant Shipping Act, 2025

Imagine a legal framework governing an entire industry, ship registration, crew licensing, vessel safety standards, still running substantially on a law passed in 1958, written for a genuinely different era of global shipping, before container ships, modern tonnage tax regimes or today's competitive flag-of-convenience registries existed. The Merchant Shipping Act, 2025, replaces exactly this decades-old framework with rules designed for how global shipping actually operates today.

The reform's central goal is attracting more ships to register under the Indian flag rather than under foreign flags of convenience, Panama, Liberia and the Marshall Islands among the most popular globally, which have historically offered simpler registration processes and more favourable tax treatment than India's older framework provided, meaning Indian-owned or Indian-operated vessels often registered abroad rather than at home.

Streamlining registration and expanding qualifying criteria for the tonnage tax scheme, covered elsewhere on this site, to specifically include inland waterway vessels for the first time, represents a genuinely deliberate attempt to make Indian flag registration more commercially attractive, more Indian-flagged tonnage means more ships subject to Indian regulatory oversight, employing Indian seafarers under Indian labour standards, and contributing to India's own maritime tax base rather than a foreign registry's.

This legislative modernisation connects directly to the Shipbuilding Financial Assistance Policy and the broader shipbuilding push covered elsewhere on this site, a modern, competitive ship registration framework and a competitive domestic shipbuilding industry work together, a shipowner is more likely to build and register a new vessel in India specifically when both the construction incentives and the ongoing regulatory framework make Indian registration genuinely competitive against foreign alternatives.