Ownership mandate in new Shipping Law may dampen GIFT city’s global ambitions

Mumbai: India is considering changes to its maritime law that could affect ship leasing at Gujarat International Finance Tec-City (GIFT City). Policymakers are looking to tighten ownership rules for vessels seeking Indian registration.

The main issues are the draft Merchant Shipping Bill and new registration rules, which would replace laws enacted in 1958. One important change is that any ship registered in India must be at least 51% owned by Indian companies. Industry experts say this could have a big impact on global investment in India’s growing maritime finance sector.


Also Read: A toll for using Hormuz would be a 'dangerous precedent', UN's ship agency says

The requirement marks a departure from the current framework, under which leasing companies established in the GIFT City have faced no such equity restrictions. This flexibility enabled the country to build a maritime finance hub to compete with Singapore and Hong Kong, attracting foreign capital through structures similar to those used in established shipping centres.

The change marks a clear break from the existing framework, say experts.

Suresh Swamy, a partner at Price Waterhouse & Co., said that as the country develops its maritime finance ecosystem in GIFT City, “regulatory clarity and global alignment will be important to sustain investor confidence and ensure ship leasing activity continues to grow within the IFSC framework.”

The UAE-based Transworld Group and Japan's Mitsui OSK Lines have recently begun operations in IFSC. Also, media reports indicate that DP World, based in Dubai, is considering starting operations in GIFT City.

Legal experts caution that the proposed threshold could disrupt sale-and-leaseback transactions, the workhorse structures of global ship finance, which depend on international capital seeking predictable legal environments and efficient deployment. A mandatory Indian-majority stake would raise transaction costs, increase complexity, and reduce the pool of investors willing to place vessels under the Indian flag, they argue.

Under the current rules, leasing companies incorporated in GIFT City can register vessels without specific equity restrictions, thereby mirroring global ship‑financing structures. This flexibility has been central to the country’s efforts to attract foreign capital and build a maritime finance ecosystem.


Also Read: Indian trade delegation to visit Washington this month, says US envoy to India Sergio Gor

Ship leasing has emerged as one of GIFT City’s more credible early success stories, helping position the centre as a participant in global maritime finance rather than a purely domestic platform.

There is also concern that capital could be redirected elsewhere. Competing jurisdictions such as Singapore and Hong Kong offer regulatory certainty and impose no comparable ownership thresholds, making them natural alternatives for global lessors seeking simplicity and scale.