COASTAL CARGO PROMOTION SCHEME - 28th July 2026 - Ministry of Ports, Shipping and Waterways - Gazette Notification PDF

Executive Summary The document outlines the proposed Coastal Cargo Promotion Scheme, announced in Union Budget 2026, which aims to double the share of coastal shipping and inland waterways from 6% to 12% by 2047. While the scheme is currently in the formation stage, the Ministry of Ports, Shipping and Waterways has already implemented significant financial concessions, legislative updates, and infrastructure projects to support this goal. Key achievements include the completion of 18 Sagarmala projects worth ₹739 crore and the establishment of dedicated coastal berths at 10 major ports.

Key Points / Main Content

• Strategic Objectives and Legislation

  • The primary goal is to increase the modal share of coastal shipping and inland waterways to 12% by the year 2047.
  • The Coastal Shipping Act, 2025 has been enacted to provide a legislative framework for the promotion of the sector.

• Financial Incentives and Operational Measures

  • A 40% concession is provided on port charges, covering both vessel and cargo-related fees for coastal cargo vessels.
  • GST on bunker fuel for Indian-flag vessels has been reduced from 18% to 5%.
  • A priority berthing policy has been notified to reduce turnaround time and improve vessel utilization.
  • "Green channel clearance" has been introduced at ports to ensure the faster evacuation of coastal cargo.

• Infrastructure and Connectivity

  • Under the Sagarmala scheme, 30 infrastructure projects for Ro-Ro, Ro-Pax, and ferry services have been sanctioned, with 18 already completed.
  • Dedicated coastal berths have been developed at 10 major ports, with Paradip Port Authority hosting the highest number (5 berths).
  • Operational Ro-Pax ferry services have significantly reduced travel times; for example, the Mumbai–Mandwa route was reduced from 4 hours by road to 1 hour by sea.
  • These services have already benefited over 65 lakh passengers and 15 lakh vehicles/cargo trucks.

Impact Analysis

Coastal Cargo Vessel Operators Impact Operators benefit from a 40% reduction in port costs and improved operational efficiency through priority berthing and green channel clearances. Action Required Utilize the dedicated coastal berths at the 10 designated major ports to optimize turnaround times.

Indian-flag Vessel Owners Impact Direct reduction in operating expenses due to the GST on bunker fuel being lowered from 18% to 5%. Action Required Ensure vessels remain compliant with Indian-flag requirements to qualify for the reduced tax rate on fuel.

Logistics and Transport Companies Impact The expansion of Ro-Ro and Ro-Pax services provides a faster and more efficient alternative to road transport for moving cargo and vehicles. Action Required Evaluate and integrate coastal sea routes into supply chain logistics to take advantage of reduced travel times and infrastructure improvements.

Port Authorities Impact Authorities are mandated to provide specialized infrastructure and adhere to national policies regarding priority berthing for coastal shipping. Action Required Maintain and manage the dedicated coastal berths as listed in the Ministry’s framework (e.g., Chennai, Cochin, Paradip, etc.).