Context

• The passage of the Indian Ports Bill, 2025, marks a watershed moment in India’s maritime governance.
• Together with the newly enacted Coastal Shipping Act, 2025, the Carriage of Goods by Sea Bill, 2025, and the Merchant Shipping Act, 2025, this legislative package aims to modernise India’s regulatory framework, replacing archaic provisions with a system better aligned to international practices.
• While the government hails these reforms as essential to streamlining governance and boosting global competitiveness, closer scrutiny reveals that the package risks centralising power, undermining federalism, and burdening smaller operators in ways that could blunt its long-term effectiveness. 

The Indian Ports Act, 2025: A Step Towards Modernisation

• India’s maritime laws have long been outdated, with the Indian Ports Act of 1908 and the Merchant Shipping Act of 1958 reflecting a world vastly different from today’s globalised shipping industry.
• The new legislative framework addresses this gap by attempting to bring India in line with international conventions, modern finance tools, and global liability standards.
• Proponents argue that the Indian Ports Act, in particular, is designed to facilitate ease of business, promote sustainable port development, and provide coherence in an otherwise fragmented regulatory environment.
• Such steps are essential for India to expand its trade horizons, attract foreign investment, and enhance its maritime reputation.

A Closer Scrutiny of the Ports Act 2025

• Federalism Undermined
  • Its most contentious feature is the creation of the Maritime State Development Council, chaired by the Union Minister of Ports, with authority to compel States to follow centrally issued guidelines.
  • While presented as a tool of cooperative federalism, critics see it as a mechanism of subordination, forcing coastal States to align with central projects such as Sagarmala and PM Gati Shakti at the expense of their local priorities.
  • This shift risks reducing the fiscal autonomy and flexibility of States, while leaving them responsible for the practical burdens of port management.
  • In effect, the legislation consolidates authority in New Delhi, weakening the federal compact enshrined in India’s constitutional order.
• Discretion and Judicial Independence
  • Equally troubling are the provisions that expand discretionary powers and curtail judicial oversight.
  • The law bars civil courts from hearing port-related disputes, directing parties instead to internal resolution mechanisms overseen by the very authorities whose decisions are under challenge.
  • Such an arrangement risks eroding impartiality and deterring private investment, since investors value transparent and independent adjudication.
  • More broadly, the vague and open-ended regulatory powers conferred by the law create the potential for arbitrary enforcement, with smaller operators likely to face the greatest compliance burdens.

Some Other Troubling Aspects of the Ports Act

• Ownership and Control Concerns
  • The Merchant Shipping Act, 2025, though notable for modernising registration rules, safety standards, and liability frameworks, contains significant loopholes in ownership safeguards.
  • Where the earlier law mandated full Indian ownership of Indian-flagged vessels, the new Act permits partial foreign ownership, leaving actual thresholds to government notification.
  • This ambiguity grants the executive excessive discretion and raises fears that India could drift into becoming a flag-of-convenience jurisdiction, where foreign owners effectively control Indian-registered ships.
  • Furthermore, provisions recognising Bareboat Charter-Cum-Demise registrations, while legitimate in principle, risk leaving foreign lessors with long-term control absent clear enforcement rules.
• Burdening Small Operators
  • The Coastal Shipping Act, 2025, too, reflects a tension between strengthening cabotage protections and expanding central discretion.
  • On paper, it reserves coastal trade for Indian-flagged vessels. Yet it simultaneously empowers the Director General of Shipping to license foreign vessels on sweeping grounds such as national security or strategic alignment.
  • Without precise definitions, such clauses invite arbitrary use, potentially undermining domestic operators.
  • Smaller players, particularly in the fishing industry, may find themselves disproportionately burdened by onerous reporting requirements and bureaucratic compliance, without corresponding support or clarity.

The Way Forward: A Reform in Need of Reform

• Taken together, the four laws represent an important recognition of the need to update India’s maritime governance.
• But their reliance on executive discretion, their centralising tendencies, and their inadequate safeguards for judicial independence and small operators risk undermining the very objectives they seek to achieve.
• India requires a legal framework that facilitates growth while preserving federal balance and ensuring fair competition.
• For this, ownership thresholds and licensing rules must be specified clearly in law rather than left to administrative notification.
• Likewise, dispute resolution mechanisms must include impartial judicial oversight, and States must have a meaningful role in planning.

Conclusion

• The Indian maritime reform package of 2025 is both a bold step forward and a source of new vulnerabilities.
• By repealing century-old laws and aligning with international practices, it seeks to propel India into the ranks of modern maritime powers.
• Yet the dangers of over-centralisation, executive overreach, and insufficient protection for small operators cannot be overlooked.
• Reform is necessary, but it must be inclusive, transparent, and respectful of federal balance if it is to serve as the foundation for India’s maritime future.