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The Centre has exempted units operating from the International Financial Services Centre (IFSC) at GIFT City from obtaining a licence from the Directorate General of Maritime Administration (DGMA) to charter foreign vessels. The move has been notified under the Coastal Shipping Act, 2025, and is expected to simplify vessel leasing for eligible entities. Earlier, foreign-flagged ships required DGMA approval to undertake coastal trade in Indian waters. The decision comes after concerns were raised that the new law could affect Indian commodity trading firms relying on foreign vessels for international operations.
The Centre has relaxed vessel leasing norms for companies operating from the International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City), Gandhinagar, by exempting them from obtaining a licence from the Directorate General of Maritime Administration (DGMA) for chartering foreign vessels.
In a gazette notification issued recently, the Ministry of Ports, Shipping and Waterways stated that, under Section 37 of the Coastal Shipping Act, 2025, foreign vessels chartered by units established in the IFSC at GIFT City have been exempted from the licensing requirement prescribed under Section 11 of the Act.
The exemption means that eligible IFSC-based entities can charter foreign-flagged vessels without seeking prior permission from the DGMA, simplifying the regulatory process for such operations.
Earlier, foreign-flagged ships were not permitted to undertake coastal trade in Indian waters unless they obtained a licence from the DGMA. The licensing requirement formed part of India's coastal shipping regulations aimed at governing the use of foreign vessels in domestic waters.
The Coastal Shipping Act, 2025, which governs the licensing and regulation of ships engaged in coastal trade, has faced criticism from sections of the shipping and commodity trading industry. Stakeholders had expressed concerns that the legislation could restrict the ability of Indian companies involved in commodity trading to charter foreign-flagged vessels exclusively for international voyages.
The latest exemption is expected to address some of these concerns for businesses operating from GIFT City's IFSC, which has been developed as India's international financial hub and offers a regulatory framework designed to facilitate global financial and leasing activities. In recent years, the government has introduced several measures to strengthen the IFSC ecosystem, including promoting ship leasing and aircraft leasing businesses through tax and regulatory incentives.
Source PTI
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