A review on the adequacy of the region's maritime safety infrastructure, as well as requirements in accordance with the International Maritime Convention was carried out during the period August 1997 to September 1997. From this, it was felt that Regional co-operation for the countries on the Indian Ocean rim, would be the solution to control the plying of sub-standard ships in the region. Accordingly, the concept of an Indian Ocean Memorandum of Understanding was mooted.

At the invitation of the Secretary General of the International Maritime Organisation, and with a generous offer of the Government of India to host the meeting, the first preparatory meeting on the developing of flag and port State capabilities in the Indian Ocean rim was held from 13th to 17th October 1997, at Mumbai, Delegations from the following countries attended the meeting:

Australia, Bangladesh, Djibouti, Eritrea, Ethiopia, India, Kenya, Maldives, Mauritius, Mozambique, Myanmar, Oman, Seychelles, Singapore, South Africa, Sri Lanka, Tanzania and Yemen.

A draft Memorandum, drawn at this meeting, was subsequently finalised between 1st and 5th June 1998, in Pretoria, during a second preparatory and signatory meeting hosted by the Government of South Africa. In addition to the countries mentioned earlier, Sudan & Iran participated in this meeting.

The Memorandum was kept open for signature at the Head Quarters of the Secretariat in Goa, India, from 5th June, 1998 to 22nd January, 1999. The first committee meeting of MOU took place at Goa from 20th to 22nd January 1999. During this period and at the first meeting, the following countries signed acceptance of the Memorandum of Understanding:

Australia, Eritrea, India, Sudan, South Africa and Tanzania. Subsequently, Mauritius and Srilanka acceded to the MOU.

Subsequently Iran, Kenya, Maldives, Oman and Yemen acceded to the MOU. As at December 2004 thirteen countries have become parties to the Memorandum. The Memorandum came into effect on 1st April 1999.