A committee was constituted in September 1974 with Mr Khusro Faramurz Rustamji as its chairman to study the problem of seaborne smuggling and the question of setting up a Coast Guard type of organization. This committee recommended the setting up of a Coast Guard Service patterned on the Navy for general superintendence and policing of our seas in peace time under administrative cover of the Ministry of Defence.
The Maritime Zones of India Act was passed on 25 August 1976. Under this Act, India claimed 2.01 million sq km of sea area in which she has the exclusive rights for exploration and exploitation of resources, both living and non-living at sea. Following this a Cabinet decision was taken by which an interim Coast Guard Organization came into being on 01 February 1977. The Coast Guard in its present shape was formally inaugurated on 18 August 1978 as an independent armed force of the union with the enactment of the Coast Guard Act 1978 by the Parliament with its motto as `VAYAM RAKSHAMAH’ which means `WE PROTECT’.