Water transport is the cheapest mode of traffic for both long and short distance. It does not use the costliest resources as in the case of air transport. However, in ancient period, shipping was one of the big industries of India, perhaps known as the Queen of Eastern Seas.
Indians were much skilled in the building of ships and used to go to different distant countries like Persia, East Africa, Malaya and Eastern Island on their ships. In this context, Shri S.L. Haja has rightly stated that 'Indian Naval power was undoubtedly a great achievement of Indian civilization.'
During 1860 to 1925, there were 102 Indian Shipping Industries but gradually all of them were destroyed by the British. Scandia Team Navigation Company was established in 1919. The history of Indian Shipping Companies from 1925 to 1945 is in-fact the history of Scandia Shipping Company.
In 1945, Government of India constituted a "Reorganisation Policy Sub Committee" under the chairmanship of Shri C.P. Ramaswami Ayer who suggested that all the coastal trade of India should be reserved for Indian ships and suitable opportunity should be given to the Indian ships in foreign trade. In 1947, the Shipping Act was enacted. It was compulsory for the ships to obtain licenses.
Eastern Shipping Corporation was established with a capital of Rs. 10 crores in March, 1950. In June, 1956, Western Shipping Corporation was set up. Similarly, in 1961 two corporations were merged into Indian Shipping Corporation. New Shipping Corporation of, India and Mogul Lines are operating under public sector and 33 companies under private sector.