OVERVIEW
- India has taken another significant step towards strengthening its maritime financial services ecosystem by exempting eligible International Financial Services Centre (IFSC) units in GIFT City from the licensing requirement under Section 11 of the Coastal Shipping Act, 2025.
- Through Gazette Notification S.O. 3690(E), dated 7 July 2026 issued under Section 37 of the Coastal Shipping Act, 2025, the Central Government has exempted foreign vessels chartered by units established in the IFSC at GIFT City from the licensing requirement under Section 11 for EXIM and international trade operations.
- The reform aims to simplify foreign vessel chartering for international and EXIM trade, enhance maritime leasing and ship financing, and position GIFT City as a globally competitive maritime services hub.
- According to the Ministry of Ports, Shipping and Waterways, the exemption is expected to strengthen India’s maritime leasing and financing ecosystem, encourage maritime investment and support the development of GIFT City as an internationally competitive maritime services centre.
KEY CHANGES INTRODUCED
- Before the notification, activities falling within the scope of Section 11 required eligible entities to obtain a licence from the maritime administration before chartering foreign vessels for the specified operations.
- The notification introduces a targeted regulatory exemption, not a comprehensive restructuring of India’s coastal shipping framework.
- The exemption, notified by the Ministry of Ports, Shipping and Waterways under the provisions of the Coastal Shipping Act, 2025, removes the requirement for eligible IFSC units to obtain a licence from the Director General of Shipping for chartering foreign vessels for operations covered under Section 11.
THE LEGAL FRAMEWORK UNDER SECTION 11 AND 37
- Section 11 establishes the statutory requirement relating to the licensing of foreign vessels for specified operations under the Act. It forms part of the regulatory framework governing the participation of foreign vessels in activities covered by the legislation and serves as a mechanism through which the maritime administration oversees such operations.
- Section 11 required a licence for a vessel, other than an Indian vessel, chartered by specified persons or entities and undertaking voyages covered under Section 10. These include voyages from India to a place outside India and voyages from a place outside India to India or another place outside India.
- Section 37, on the other hand, empowers the Central Government to exempt any foreign vessel or class of foreign vessels from the operation of the Act or specified provisions, subject to conditions it considers appropriate.
- Yet, a foreign vessel chartered by an Indian entity outside GIFT City will continue to require a licence under section 11.
CONCLUSION
- Globally, leading maritime centres derive substantial economic value not only from ports and shipping operations but also from high-value maritime services such as ship leasing, marine insurance, vessel financing, chartering, legal advisory, arbitration and maritime asset management.
- Jurisdictions including Singapore, London and Dubai have successfully developed ecosystems where shipping companies, financial institutions and maritime service providers operate within integrated regulatory and financial frameworks.
- India has been seeking to establish a similar ecosystem through GIFT City, which was created to serve as the country’s premier International Financial Services Centre.
- Within this vision, maritime finance represents an important pillar. Encouraging ship-owning structures, leasing companies and maritime investment vehicles to operate from GIFT City enables India to participate more actively in the financial dimensions of global shipping rather than remaining primarily a provider of cargo, ports and logistics infrastructure.
