At first glance, it may seem like a bureaucratic detail — just a change in the flag fluttering at the stern. But beneath that symbolic act lies a much larger transformation in the global shipping landscape. The decision to reflag ships to India reflects a convergence of economic logic, strategic positioning, and geopolitical foresight.
For decades, India’s shipping registry lagged behind those of global maritime nations. High operational costs, rigid regulations, and limited incentives often drove shipowners to flags of convenience — nations like Panama, Liberia, or the Marshall Islands that offered tax breaks and flexible rules. As a result, many Indian-origin vessels sailed under foreign flags, taking advantage of lighter compliance burdens and lower costs.
But that equation is beginning to change.
The Indian government, through the Merchant Shipping Act of 2024, has undertaken a major overhaul of maritime regulations. The reforms simplified ship registration procedures, eased crewing norms, and reduced the cost of compliance. More importantly, it created a clear path for foreign shipowners to register vessels under the Indian flag, allowing them to benefit from India’s growing maritime ecosystem without the earlier regulatory red tape.
This legislative reform has acted as a magnet for global shipping lines seeking both operational flexibility and deeper ties with India’s booming trade economy.
The first visible signs of this trend emerged in 2025 when Maersk registered two of its container ships under the Indian flag. The move came shortly after CMA CGM made similar decisions, establishing an operational presence at Gujarat International Finance Tec-City (GIFT City) — a special economic zone designed to attract global maritime and financial players.
For Maersk, the decision was driven by both strategic and operational reasons. The company has been expanding its integrated logistics operations in India, leveraging the nation’s strong port network and manufacturing growth. Flagging vessels under India allows Maersk to simplify regulatory compliance for domestic trade routes, while also signalling a long-term commitment to the Indian market.
CMA CGM, on the other hand, has gone a step further. The French carrier signed a landmark deal with Cochin Shipyard Limited (CSL) to construct six LNG-powered container ships, each over 15,000 TEU in capacity. The partnership not only marks India’s entry into large-scale container shipbuilding but also underscores the growing trust international lines have in Indian shipyards.
Meanwhile, MSC, which already commands over 800 ships globally, is reportedly exploring opportunities to register part of its future fleet in India — a move that would enhance its flexibility in South Asian and Middle Eastern trade lanes.
For the world’s shipping giants, turning to the Indian flag offers a blend of economic savings, operational leverage, and geopolitical balance.
First, India’s maritime administration has significantly reduced the costs associated with ship registration, documentation, and manning. The simplified processes at GIFT City allow shipowners to obtain approvals and clearances in days rather than months. Additionally, the financial ecosystem at GIFT City provides access to tax-neutral leasing structures, lowering financing costs for fleet expansion.
Second, India’s location and market size make it a vital hub in global logistics.
With 12 major ports and over 200 minor ports, India handles more than 95% of its trade by volume via sea. As global supply chains increasingly pivot toward South Asia, shipping lines see India as both a market and a manufacturing base, enabling them to integrate operations seamlessly across export-import networks.
Third, in an era marked by geopolitical tensions — from trade wars to sanctions — the Indian flag offers a neutral, stable identity. Many carriers face mounting scrutiny over where their ships are registered, particularly in the wake of conflicts involving sanctioned states or trade route disruptions in the Red Sea and the Taiwan Strait. The Indian flag provides a non-aligned, politically balanced option, offering flexibility to operate in diverse regions without the baggage associated with certain flag states.
While the reflagging trend is grabbing headlines, a parallel story is unfolding in India’s shipyards. For years, India was known mainly for its ship recycling industry, particularly at Alang, the world’s largest shipbreaking yard. Now, it’s taking bold steps into ship construction and repair, positioning itself as a manufacturing powerhouse for the next generation of vessels.
The CMA CGM–CSL agreement to build six LNG-powered container ships marks a historic leap for Indian shipbuilding. These environmentally advanced vessels will not only meet IMO’s carbon reduction goals but also demonstrate India’s capacity to deliver large, complex ships on par with South Korea, China, and Japan.
Additionally, partnerships between Cochin Shipyard, L&T Shipbuilding, and global firms like Seatrium Offshore Technology from Singapore are expanding India’s portfolio in offshore engineering, renewables, and naval construction. The synergy between policy reforms and industrial capability is reshaping India’s maritime profile — from a regional operator to a global shipbuilding and flagging hub.
At the heart of this transformation lies GIFT City, India’s International Financial Services Centre (IFSC). It’s not just a business district — it’s the engine driving India’s emergence as a global maritime registry.
Under the IFSC framework, shipowners can set up leasing and financing entities, register vessels, and manage crew operations through a single-window system. The model closely mirrors successful international registries like those in Singapore and Norway but with added cost advantages.
GIFT City’s regulatory body, the International Financial Services Centres Authority (IFSCA), has made it easier for foreign shipowners to lease or finance vessels using Indian institutions. This gives global carriers a reason to diversify their registries — lowering costs while aligning with India’s rapidly growing trade and logistics network.
For shipping companies, the benefits of registering vessels under the Indian flag are clear:
Lower costs due to competitive taxation and streamlined registration.
Access to India’s vast port and logistics infrastructure.
A stronger foothold in one of the world’s fastest-growing economies.
Political neutrality amid shifting global alliances.
For India, the rewards are even greater. Every ship registered under the Indian flag enhances the country’s maritime standing, adds employment for Indian seafarers, boosts domestic financing, and generates recurring revenue through port fees and marine services.
It also deepens India’s integration into global trade systems, giving it greater influence in international shipping regulations and negotiations.
As global trade patterns evolve, India is positioning itself not just as a participant but as a maritime power. The reflagging of ships by major global carriers signals confidence in India’s regulatory stability, industrial potential, and global reach.
Industry experts predict that by the end of the decade, India could emerge as one of the top ten nations in the world by tonnage of ships registered under its flag. The combination of policy reform, industrial capability, and global trust has created fertile ground for India’s maritime renaissance.
For Maersk, CMA CGM, MSC, and others, sailing under the Indian flag is more than a symbolic gesture — it’s a strategic alignment with the future of global shipping.
In a world where trade routes are being redrawn and sustainability defines competitiveness, the Indian flag represents a blend of cost efficiency, neutrality, and innovation. It’s a small change with big implications — one that could reshape how the world’s biggest ships navigate both the seas and the politics of global commerce.
