Government exempts IFSC GIFT City units from licensing requirements for chartering foreign vessels

In an initiative to strengthen India’s maritime services ecosystem and increase the country’s competitiveness in global shipping, the government has exempted the units set up at the International Financial Services Center (IFSC), GIFT City, Gandhinagar, from the license requirement for chartering foreign vessels for Exim and international trade operations.

An 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 license from the Director General Transport for hire of foreign vessels for operations referred to in Section 11.

The notice is effective immediately.

Quick answers to key questions

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The exemption allows units in IFSC GIFT City to charter foreign vessels for Exim and international trade operations without requiring a license from the Director General of Shipping under the Coastal Shipping Act, 2025.

This reform aims to strengthen India’s maritime services ecosystem, increase competitiveness in global shipping and attract maritime investment to make GIFT City a leading hub for marine leasing and financing.

The exemption is expected to simplify the regulatory framework, promote marine leasing, ship financing and promote India’s emergence as a preferred destination for maritime business and international shipping services.

Yes, even if the licensing requirement is removed, the existing frameworks governing coastal trade and the cabotage regime remain unchanged, ensuring that national trade regulations are still in place.

The initiative is likely to deepen maritime capabilities, attract global investment, facilitate ship ownership and chartering structures and strengthen India’s position as a global hub for maritime services.

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The reform is expected to strengthen GIFT City as a globally competitive marine leasing and financing hub, facilitate maritime investment and promote India’s emergence as a leading maritime services hub, Ministry ports, shipping and waterways said in a statement.

The reform is a significant prerequisite for the growth of India’s maritime financial ecosystem. Simplification of the regulatory framework governing the chartering of foreign vessels for international maritime operations is expected to promote maritime leasing, ship financing and ship ownership activities through GIFT City while promoting a globally competitive business environment for maritime businesses.

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“The last 12 years have transformed India’s maritime sector through ground-breaking reforms, world-class infrastructure and unprecedented policy support. We have laid a solid foundation. The next phase is to unlock the full potential of the maritime industry with minimal management to increase competitiveness and efficiency that propel India’s journey to Viksit Bharat, Sarbananda.

The new measure is also expected to facilitate greater participation of global capital in maritime assets, encourage the creation of ship ownership and leasing structures in India and accelerate the development of a comprehensive maritime ecosystem comprising ship leasing, financing, asset management and other value-added maritime services, the ministry said in a statement.

This policy is in line with the government’s vision of establishing GIFT City as a world-class international financial services hub for global maritime business. Importantly, the exemption is limited to the licensing requirement under section 11 of the Coastal Navigation Act 2025 and does not change the existing framework governing coastal trade.

Even with the new 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.

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The cabotage regime regulates the transport of goods or passengers between two places within the same country by a carrier from another country. Historically rooted in maritime transportation, these laws protect domestic industries, preserve local jobs, and ensure national security by restricting foreign shippers from participating in internal domestic trade.

The reform marks another important milestone in the government’s ongoing efforts to build a globally competitive maritime ecosystem through progressive policy interventions, the ministry said in a statement.

By strengthening the regulatory framework for maritime financial services and ship leasing, this initiative is expected to deepen India’s maritime capabilities, attract global investment and strengthen the country’s position as a preferred destination for maritime business and international shipping services.