India’s 20 Maritime Reforms and the $75 Billion Freight Drain
Why in the news
The shipping ministry lined up a 90-day package of 20 reforms to cut logistics costs and stop a huge foreign exchange outflow on freight paid to overseas ship owners.
Key facts
- Plan: 20 sectoral reforms, Q1 of FY27, a 90-day sprint under Maritime Amrit Kaal Vision 2047.
- Problem: under 5% of EXIM cargo is carried by Indian-owned vessels; fewer still are built in Indian yards.
- Cost: about $75 billion a year paid to foreign shipping lines.
- Regulator: Directorate General of Shipping renamed DGMA, with wider powers over safety, training and ship registration.
- Coastal Cargo Promotion Scheme (proposed in Budget 2026-27): raise coastal and inland waterway share from 6% to 12%.
| Lever | Detail |
|---|---|
| DGMA | Moves beyond licensing to full regulation; aligns with global peers such as US Coast Guard or UK MCA |
| Shipbuilding Financial Assistance Policy | Revamped to push PSU joint ventures for building and running Indian vessels |
| Maritime Development Fund (MDF) | ₹25,000 crore for long-term, low-cost funding of shipyards and fleet growth |
| Coastal Cargo Promotion Scheme | Double water-borne share, 6% to 12% |
Background
- Indian flagging: a ship registered in India comes under Indian law and tax. Many Indian owners use flags of convenience such as Panama or Liberia for lower taxes; easier registration and tax rules would keep profits, insurance and crew jobs in India.
- Maritime Amrit Kaal Vision 2047: roadmap to a global maritime power by the 100th year of independence; goals include 10,000 MTPA port capacity (four times today), a top-5 shipbuilding and repair hub, and 100% green power at major ports.
- Ease of doing business: DGMA acts as a single window for registration and safety audits, saving time.
Significance
Moving cargo from road and rail to water is more fuel-efficient and cheaper, and a stronger Indian fleet reduces supply chain vulnerability.
Exam angle
- Renaming: DGS to DGMA.
- Fund size: ₹25,000 crore MDF.
- Share target: coastal and inland waterways 6% to 12%.