Govt exempts IFSC GIFT City units from licensing requirement for chartering foreign vessels

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 notification comes into force with immediate effect.Quick answers to key questions•5 QUESTIONSThe exemption allows units in the IFSC GIFT City to charter foreign vessels for Exim and international trade operations without requiring a license from the Director General of Shipping, as per the Coastal Shipping Act, 2025.This reform aims to bolster India's maritime services ecosystem, enhance competitiveness in global shipping, and attract maritime investments to make GIFT City a leading maritime leasing and financing hub.The exemption is expected to simplify the regulatory framework, encouraging maritime leasing, ship financing, and supporting India's emergence as a preferred destination for maritime business and international shipping services.Yes, while the licensing requirement is removed, existing frameworks governing coastal trade and the cabotage regime remain unchanged, ensuring that domestic trade regulations are still in effect.The initiative is likely to deepen maritime capabilities, attract global investment, facilitate ship-owning and leasing structures, and reinforce India's position as a global maritime services center.The reform is expected to strengthen GIFT City as a globally competitive maritime leasing and financing hub, facilitate maritime investments and support India’s emergence as a leading maritime services centre, ministry of ports, shipping and waterways said in a statement.The reform is a significant enabler for the growth of India’s maritime finance ecosystem. Simplifying the regulatory framework governing the chartering of foreign vessels for international shipping operations is expected to encourage maritime leasing, ship financing, and ship-owning activities through GIFT City, while fostering a globally competitive business environment for maritime enterprises.“The last 12 years have transformed India’s maritime sector through landmark reforms, world-class infrastructure and unprecedented policy support. We have laid a strong foundation. The next phase is to unlock the full potential of the maritime industry by minimal governance to enhance competitiveness, efficiency that powers India’s journey towards Viksit Bharat,” Union minister of ports, shipping and waterways, Sarbananda Sonowal, said.The new measure is also expected to facilitate greater participation of global capital in maritime assets, encourage the establishment of ship-owning and leasing structures in India, and accelerate the development of a comprehensive maritime ecosystem encompassing ship leasing, financing, asset management and other value-added maritime services, the ministry’s statement said.The policy aligns with the government’s vision of establishing GIFT City as a world-class International Financial Services Centre for global maritime business. Importantly, the exemption is limited to the licensing requirement under Section 11 of the Coastal Shipping Act, 2025 and does not alter the existing framework governing coastal trade.Even with fresh notification, the prevailing cabotage regime and safeguards applicable to coastal shipping remain unchanged, while regulatory flexibility has been provided for Exim and international trade operations.A cabotage regime governs the transport of goods or passengers between two points within the same country by a transport o