The shipping ministry has granted a significant regulatory exemption to companies operating in GIFT City, allowing them to lease foreign vessels without obtaining permission from the Directorate General of Maritime Administration (DGMA). According to the July 7 gazette notification, this exemption applies specifically to units set up in the International Financial Services Centre at the Gujarat International Finance Tec-City (GIFT), Gandhinagar, Gujarat. The ministry's decision comes under Section 37 of the Coastal Shipping Act, 2025 (20 of 2025). As per the notification, the exemption covers foreign vessels chartered by a unit set up in the International Financial Services Centre at the Gujarat International Finance Tec-City (GIFT), Gandhinagar, Gujarat from the requirement of a license under section 11 of the said Act. The Coastal Shipping Act 2025, which deals with licensing of ships, has come under criticism for hampering the ability of Indian entities engaged in commodity trading to charter foreign flag ships exclusively for overseas runs.
The latest government announcement positions this exemption as a major policy initiative aimed at strengthening the maritime services ecosystem and enhancing the country's competitiveness in global shipping. According to the Ministry of Ports, Shipping and Waterways, 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. The exemption specifically allows eligible IFSC units to charter foreign vessels for EXIM and international trade operations without obtaining a licence under the Coastal Shipping Act. This regulatory framework simplification is designed to encourage maritime leasing, ship financing and ship-owning activities through GIFT City while fostering a competitive maritime business environment.
The exemption represents a significant shift from existing maritime regulations and addresses long-standing industry concerns. Foreign flag ships were not allowed to engage in coasting trade in India's waters without licence granted by DGMA. According to industry experts, this previous restriction has now been removed specifically for entities operating within the tax-free International Financial Services Centre at GIFT City. Amit Oza, Director, Astramar Shipping & Trading Services, described the decision as "a huge step in the right direction" that will ensure parity in regulations with other jurisdictions and greatly enhance the ecosystem for vessel operators to conduct business from IFSC GIFT City. The exemption specifically targets the challenges faced by companies operating in the International Financial Services Centre at GIFT City.
Industry experts have welcomed the regulatory change as crucial for India's maritime ecosystem. "Each of these ship operators' charters hundreds of ships annually; the economic value add of this activity is immense. We need to bring them back to India," said an IFSC official. The exemption addresses the challenge that Indian origin ship operators and Indian capital have moved out of India due to licensing requirements. "But operators who are sitting in Dubai and Singapore, we want them to operate from India. What the operators are saying is if they are based out of India and fix an Indian sub charterer then it can be done in one licence," the official explained. The IFSC argues that new tonnage doesn't want to come in from outside, especially foreigners, because the Foreign Exchange Management Act (FEMA) is very difficult to handle from the Domestic Tariff Area, but entities are comfortable coming to IFSC because everything is in dollars and FEMA doesn't apply there. The 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.
