What is domestic coastal shipping in India?

Domestic coastal shipping refers to cargo transport between Indian ports using Indian-flagged vessels, protected under India's cabotage law (Merchant Shipping Act 1958). Only 60%-Indian-crewed vessels qualify. The sector handles ~180 million tonnes annually and is growing due to government push for 'Sagarmala' port modernization and Middle East supply chain disruptions increasing demand for reliable domestic alternatives.

How much does it cost to start a coastal shipping business in India?

INR 8–15 crore for a full-fledged operation (vessel purchase, registration, crew, insurance, 6 months operations). MVP version: INR 2–4 crore (leased vessel, minimal crew, 3-month runway). Breakdown: vessel lease INR 1–2 crore/year, crew salaries INR 15–25 lakh/month, insurance INR 20–50 lakh/year, port fees INR 5–10 lakh/month, registration/compliance INR 10–20 lakh one-time.

Is domestic coastal shipping profitable in India?

Yes. Freight rates are INR 2,000–8,000 per tonne depending on route and cargo. A 1000-DWT vessel making 2 trips monthly (2000 tonnes capacity) at average INR 5,000/tonne generates INR 20 lakh/month gross revenue. Operating costs (fuel, crew, port, maintenance) are INR 8–12 lakh/month, yielding 40–50% gross margins. Competitors are limited due to cabotage regulations, supporting premium pricing.

What regulations apply to domestic coastal shipping in India?

Merchant Shipping Act 1958 (cabotage requirement: Indian flag, 60% Indian crew), Directorate General of Shipping (DGS) vessel certification, Indian Register of Shipping (IRS) class approval, SOLAS and MARPOL international maritime safety standards, GST 5% on freight charges, Port Authority licensing per Ministry of Ports/Shipping/Waterways, Insolvency and Bankruptcy Code 2016 for corporate structure, Environmental Impact Assessment (EIA) for new routes.

Coastal Shipping Business India 2026 — Entrepreneur Guide

AI SummaryDomestic coastal shipping in India is a high-barrier, high-margin opportunity worth INR 37,500–57,600 crore annually (15–18% of INR 2.5–3.2 lakh crore logistics sector). The February 2026 Middle East crisis has spiked oil and import costs, forcing shippers (e-commerce, FMCG, steel) to seek cost-effective domestic alternatives. Cabotage protection limits competition to Indian-flagged vessels, enabling new entrants with modern fleets to capture market share at 20–30% discounts to incumbent rates. Ideal for shipping entrepreneurs, logistics professionals, or PE-backed supply chain operators with INR 5+ crore capital and 18–24 month investment horizon.