Shipping plays an important role in the overall transportation chain of the country. It is the optimal low cost option for the transportation of bulk cargo. It has a huge multiplier effect in terms of boosting trade, creating employment and earning foreign exchange. It also energises other ancilliary sectors like shipbuilding, shipbreaking, ship repairing, maritime training, etc.

The Indian shipping industry, over the years, has come to occupy a predominant place in the country's coastal trade. It has developed a strong legacy of physical and financial assets; excellent manpower resource; vast knowledge base; and reliable infrastructure. India has the largest merchant shipping fleet among the developing countries and ranks 17th globally in shipping tonnage. The shipping tonnage which was only 1.92 lakhs Gross Tonnage (GT) on the eve of Independence, now stands at 84.17 lakh GT with 774 vessels (as on 31st December,2006). The share of ships in the India's overseas trade is around 13.7 per cent. Besides, there are 28 shipyards across the country which are fast emerging on the global platform as preferred destinations for building vessels. India also contributes significantly towards international cooperation in maritime shipping by participating in the activities of the various international bodies like International Maritime Organisation (IMO), UNCTAD, etc.

Given India's strategic location, there is tremendous potential for further development of the shipping industry. Accordingly, the Government has been taking several policy measures and incentives for encouraging the growth of this sector. These include rationalization of the fiscal regime for the shipping industry by introducing tonnage tax system from the financial year 2004-05, in order to provide the Indian shipping industry a level playing field vis-a-vis international shipping companies and also facilitate the growth of Indian tonnage. Also, the National Shipping Board has been established as a permanent statutory body, under the Merchant Shipping Act, 1958, to advise the Government on matters related to shipping including development thereof.

The Directorate General of Shipping, an attached office of the Ministry of Shipping, was established for administering the Merchant Shipping Act, 1958 on all matters relating to shipping policy and legislation; implementation of various International Conventions relating to safety, prevention of pollution and other mandatory regulations of the International Maritime Organizations; etc. It is also responsible for creation of the trained manpower required for the merchant navy fleet of the country. For meeting this requirement, the Directorate General imparts pre-sea and post-sea training in various disciplines through a number of training institutes both in public and private sector.