The ports, shipping and waterways ministry has issued the draft Merchant Shipping Bill, 2020, making way for these changes.
“Earlier, if a ship was to be flagged in India, it had to be 100% owned by an Indian, while with the new bill, we have proposed that a vessel needs to have ‘substantial’ stake of around 51% by an Indian, while the remaining can be held by a foreign party,” the official told ET.
The proposed bill looks to repeal and replace the Merchant Shipping Act, 1958 and the Coasting Vessels Act, 1838.
It has been drafted with the primary aim of promoting growth of the Indian shipping industry by incorporating the best practices adopted by other advanced countries such as the US, UK, Japan, Singapore and Australia, an official statement said on Thursday.
The bill seeks to increase India’s tonnage by widening the eligibility criteria for ownership of vessels and providing for the registration of bareboat charter cum demise, thereby increasing opportunities for international trade, it said.
Bareboat charter means a contract for the lease of a ship for a stipulated period of time, by virtue of which the lessee has complete possession and control of the ship, including the right to appoint the master and crew of the ship, for the duration of the lease. Bareboat charter-cum-demise means a bareboat charter where the ownership of the ship is intended to be transferred after a specified period to the charterer to whom it has been chartered.
The proposed bill seeks to do away with the requirement of a general trading license for Indian vessels, besides enabling electronic means of registration and granting statutory recognition to electronic agreements, records, and logbooks, in addition to electronic licenses, certificates and payments. It seeks to empower the director general of shipping to take action against vessels that are unsafe, and pose a threat to safety of life at sea and environment, and includes a procedure for appeal from detention orders.
Among other changes, it also incorporates provisions that encourage active enforcement of pollution prevention standards and the central government has been granted the power to mandate compulsory insurance or such other financial security, for pollution damage.
“The bill seeks to provide increased opportunities for investment and provide greater impetus to a self-reliant domestic investment climate in the maritime industry,” the statement said.
The provisions regulating the maritime education, training, certification and the recruitment and placement of seafarers and ease of registration of ships under the Indian flag will give an impetus to the quality and quantity of Indian seafarers, consequently boosting employment opportunities for Indian seafarers in the national and international market, the government said.