The Centre now allows vessels majority-owned by Indian citizens and other eligible owners to qualify for registration as Indian.
This comes after changes were made to Section 15(1) of the Merchant Shipping Act, 2025, which was published in the Gazette of India on November 12.
The changes perceive a vessel as the sum of 100 whole shares—no fractional shares, as they cannot be registered—and says that eligible owners must hold at least 51 of the 100 shares.
In comparison, the 1958 edition of the Merchant Shipping Act required ships to be wholly owned by qualifying Indian citizens, companies or co-operative societies in order to secure Indian registry.
Opening up the Indian registry actually marks a major push for India's wider fleet aggregation strategy—specifically the National Shipping Board's (NSB) plans to add 100 ships to India's commercial fleet of 1,600 over the next five years.
This is because the NSB, a statutory body established under Section 4 of the Merchant Shipping Act, 1958, had called for the 100-ship push at its first Sagar Samvaad (Oceans Dialogue) back in August this year. It is responsible for advising the Union shipping ministry on shipping policy, tonnage, seafarer welfare and port-linked maritime development.
One of the key concerns raised at that event was a crucial cost gap: that flying the Indian flag remains 16-20 per cent costlier than operating under a foreign one—a gap they attributed to a number of issues.
Yet, they pointed out that under the Right of First Refusal (RoFR) mechanism used by the maritime sector to award contracts, Indian owners are still expected to match foreign freight rates to win cargo.
This led to the NSB proposing five key reforms across ministries to help boost Indian commercial shipping.
Opening up the Indian registry—which is a part of the stated aims of the Merchant Shipping Act, 2025 to "encourage Indian flagging of ships"—is thus alligned with the NSB's reforms, as India's fleet aggregation strategy involves not just building new ships, but also expanding the scope of what it means for a ship to carry the Indian flag.
The NSB's five-pillar reform roadmap includes fiscal reform, assured cargo support, access to competitive financing, regulatory streamlining, and improved ease of doing business (EoDB).
Other details about the new changes
Eligible owners for Indian registry include Indian citizens, including Non-Resident Indians (NRIs), and Overseas Citizens of India (OCIs).
Companies or bodies established by, or under a central/state law also qualify if their registered office or principal place of business is in India.
Cooperative societies, multi-state cooperative societies and limited liability partnerships registered or deemed registered under the applicable laws are also eligible, subject to the same India-based office or business requirement, the gazette notification read.
Cases where NRIs or OCIs hold majority interest also require an authorised representative for the registration process.
The representative must be either an Indian citizen resident in India or a body corporate incorporated in India with its registered office or principal place of business in the country. However, a vessel wholly owned by an OCI is exempt from compulsory Indian registration.
