Oil spills are known to be one of the most hazardous industrial accidents. The effects of these oil spills are tenacious and cause severe environmental damage. These oil spills involve enormous amounts of money and manpower for removal and restoration. The fixation of liability becomes difficult if the cause of the oil spill is based on a natural disaster. The international instruments include the International Convention for the Prevention of Pollution from Ships, 1973, which governs accidental and operational spills, the International Convention on Civil Liability for Oil Pollution, 1969, which fixes the liability and the International Convention on the Establishment of an International Fund for Oil Pollution Damage, 1971, which financially assist in mitigating the environmental costs. The conventions are given enforceability by incorporating them in India through the Merchant Shipping Act, 1958. Despite several legislative and administrative frameworks, it is the locals and residents who end up removing the oil spills instead of the polluters or government agencies. Most of the time, the cleaning is done without the aid of any appropriate gear or technological equipment, which raises concerns about health and hygiene. This research attempts to critically analyze the legal and economic aspects of oil spills in India through the case study method. It also aims to address the issues in the legal framework and bridge the gap between the lacunae in the legislative framework and the environmental costs and concerns involved in oil spills in India.