A change to India’s coastal policies meant to boost local economies could spell disaster for the communities whose livelihood depends on healthy marine ecosystems, according to several groups.

Under the Coastal Regulation Zone, densely populated areas along India’s coasts can be industrialized beyond 50 meters (164 feet) from the high-tide line, from a previous threshold of 200 meters.

Temporary tourism infrastructure such as shacks and mobile toilets also will be allowed in areas where any form...