India overhauls ship registration rules, moves entirely online; GIFT City Moves Closer to Global Ship Leasing Hub Status

India has rolled out a sweeping overhaul of how ships get registered under its flag, doing away with decades-old paperwork-heavy procedures in favour of a fully digital system. The Ministry of Ports, Shipping and Waterways notified the Merchant Shipping (Registration of Vessels) Rules, 2026 on August 21, replacing rules that had been in place since 1960, under the newly enacted Merchant Shipping Act, 2025.

The biggest practical change for shipowners: a vessel no longer needs to physically visit an Indian port to get registered, or call at one afterward just to complete the process. Everything from applying for a ship’s name and official number to filing ownership declarations can now be done online, cutting out a requirement that had long added time and cost for owners registering vessels built or operating abroad.

The rules also modernise how ships are marked and identified. Vessel names and ports of registry must now be painted in both Hindi and English on the hull, with the Hindi lettering placed above the English, and international identification markings must meet updated global safety standards.

A significant part of the new framework deals with foreign vessels chartered by Indian companies on a bareboat basis, vessels that are essentially rented and operated under the Indian flag while ownership sits abroad. These ships will now get priority for cargo just below fully Indian-owned vessels, but they must fly the Indian flag exclusively for the length of the charter, capped at five years.

The rules also tighten requirements around what’s called Indian Controlled Tonnage, ships owned by Indian entities but registered under foreign flags. Companies will now have to ensure at least half their crew on such vessels are Indian nationals, and report crew deployment details to the government twice a year, in April and October. The idea is to keep tabs on the growing fleet of foreign-flagged vessels that are effectively Indian-owned. The one carve-out here is for financial institutions operating out of GIFT City’s International Financial Services Centre, which are exempt from these tonnage requirements when registering vessels abroad.

That carve-out is part of a broader push to position GIFT City as a global hub for ship leasing and maritime finance. In July, the government exempted eligible GIFT IFSC units from the licensing requirement under Section 11 of the Coastal Shipping Act, 2025 when chartering foreign vessels for export-import and international trade operations. The move removes an additional regulatory layer for ship-leasing businesses that use foreign-flagged vessels, simplifying compliance and strengthening GIFT City’s proposition as an international maritime services centre.

For the shipbreaking industry, the rules carve out a separate, faster registration route for vessels coming to India solely to be scrapped, distinct from full commercial registration, aligning the process with India’s ship recycling laws.

The overhaul also lays out, in far more detail than before, what happens when a ship changes hands through death, bankruptcy or court-ordered sale, including a clear pecking order for who gets paid first from sale proceeds. Seafarers’ unpaid wages now sit right at the top of that list, ahead of even mortgage lenders and government dues.

Ships that sit idle for three years without survey or commercial use can now be formally flagged as “inactive” in the register, a status that bars them from putting to sea until they’re recertified and restored.

Along with the procedural changes, the government has revised its fee schedule, registration will cost Rs 2.5 per gross tonne, with a floor of Rs 5,000 and a ceiling of Rs 2,00,000 for the largest vessels, while a new fee of Rs 1,00,000 has been introduced for registering a vessel’s domain name.