The Indian coastline is dotted with 12 major ports and 187 minor ports. India has one of the largest merchant shipping fleet and is ranked 16th among the maritime countries.
The major ports in India handled 271.29 million tonnes (MT) traffic during April-September 2010-11, as compared to 267.98 MT handled during the same period last year, registering a growth of 1.23 per cent, according to Indian Ports Association data.
There are 27 shipyards in the country, six under central public sector, two under state governments and 19 under private sector undertakings.
Global construction and mining company Leighton Group plans to invest around US$ 50 million in two port projects in India being developed with Vedanta group firm Sterlite Industries.
The Ennore Port Ltd (EPL) has signed a concession agreement with Bay of Bengal Gateway Terminals Pvt Ltd for the construction and development of the US$ 301.48 million container terminal at Ennore on a build, own and transfer basis.
Indian Molasses Company (IMC) plans to invest about US$ 11.92 million to set up a liquid cargo berth and other handling equipment on a DBFOT basis (design, built, finance, operate and transfer) with Visakhapatnam Port on a public-private partnership (PPP) basis.
Vizag port has signed an agreement with ABG Infra Logistics Limited to develop the WQ-6 berth with an investment of US$ 24.92 million.
UK-based Eredene Capital PLC, has won a bid in a consortium to build and operate the container terminal at Ennore Port. The estimated cost of the project is US$ 311.7 million.
International interest in Indian Shipping Industry
Investment banks with primary focus on shipping such as the German Konig and Cie Asia Advisors Pvt. Ltd, DnB NOR Bank ASA from Norway and the world's largest shipping bank, HSH Nordbank, have all set up operations in India.
Classification societies such as Korean Register of Shipping and Germanischer Lloyd have also set up shop in India. Moreover, global firms including Rio Tinto and Noble Group are interested in participating in India's port expansion projects.
India is becoming a favourite hunting ground for port and export-import trade operators from western countries. Recently many foreign ports and their trade delegations have been doing the rounds of export-import centres of the country looking for possible avenues for trading opportunities.
Investments Policy Update
According to the Planning Commission, US$ 19.6 billion will be invested in the ports sector during the Eleventh Plan (2007-2012).
The sector witnessed foreign direct investment (FDI) of around US$ 1,632.79 million during April 2000 to August 2010, as per the data released by the Department of Industrial Policy and Promotion (DIPP).
As per the Ministry of Shipping, private investments in PPP ports projects during 2009-10 stood at around US$ 3.92 billion. This includes cost of US$ 597.01 million for 13 projects awarded in 2009-10. The target for generating private investments in PPP ports projects for 2010-11 is around US$ 3.13 billion.
According to Mr G K Vasan, Union Minister of Shipping, 24 PPP projects involving an investment of around US$ 1.47 billion have been completed and another 19 PPP projects in major ports are under implementation, involving an investment of almost US$ 2.83 billion. Currently 22 PPP projects are under bidding and scheduled to award in current financial year involving an investment of almost US$ 3.62 billion.
Government of Gujarat has proposed a policy to facilitate landlocked states to set up ports, along its long coastline is likely to see development of 30 new ports over the next five years with an investment of around US$ 20.36 billion, as per study by an industry association.
100 per cent foreign direct investment (FDI) is allowed under the automatic route for:
To provide a fillip to port development in the country, the Government of India had prepared the National Maritime Development Programme for the major ports. Under the programme, Government has identified 276 port projects with an estimated investment of US$ 20.8 billion.
PPP is seen by the government as the key to improve major and minor ports.
In March 2010, the Union Cabinet approved the proposal of the Ministry of Shipping to declare Andaman and Nicobar ports as major port and established the Andaman and Nicobar Port Trust with its headquarters at Port Blair.
Exchange rate used:
1 USD = 46.07 INR (as on August 2010)
1 USD = 44.44 INR (as on October 2010)