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April, 2011

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.

Indian shipbuilding industry currently accounts for about 1 per cent of the global shipbuilding market and is targeting a world share of 5 per cent by 2017.

India’s external trade, as a proportion of gross domestic product (GDP) has more than doubled in the last 10 years and is close to 40 per cent. Bulk of this international trade is carried through shipping.

The traffic handled at major ports is projected at 615.70 MT during 2011-12 as per National Maritime Development Programme (NMDP).

Around 95 per cent of India’s foreign trade by volume and 70 per cent by value is transported through sea. Major ports in India account for 75 per cent of the total cargo by volume handled.

The total volume of traffic handled by all the Indian ports during 2009-10 was 849.9 million tonnes (MT). Non-major ports accounted for around one-third of the total sea-borne trade. The growth in cargo handled at major and non-major ports in 2009-10 was recorded at 5.8 per cent and 35.4 per cent respectively as compared to 2.2 per cent and 3.3 per cent in 2008-09.

The Indian tonnage for the first time has crossed 10 million GT mark and as on 31.01.2011 the Indian fleet stands at 10.38 million GT. With this India has entered the list of select countries in the world who have managed this feat.

Major Investments

  • Adani Group arm Mundra Port and SEZ (MPSEZ) will develop non-liquefied natural gas (LNG) port facilities at Hazira in South Gujarat. Industry sources estimates MPSEZ to invest US$ 173.27 million in the first phase.
  • KMC Infratech Ltd, has received an equity investment of Rs 500 crore (US$ 111.93 million) from 3i India Infrastructure Fund. The company is currently involved in the making of 10 build, operate and transfer (BOT) road projects of 5,000 km across the country.
  • Mundra Port and Special Economic Zone (MPSEZ), subsidiary of Ahmedabad-based Adani Enterprises Limited (AEL), has won a bid to develop a coal import terminal at Vishakhapatnam. The terminal will be built at a cost of over US$ 66.74 million.

International Interest in Indian Shipping Industry

The Government of India is focussing on port infrastructure development in the country and is promoting private participation and foreign direct investment (FDI). The ports sector attracted private equity (PE) investments worth US$ 383 million between January 2005 and July 2010. Driven by the growth in international trade, the cargo handled at Indian ports is projected to grow at 7.7 per cent per annum until 2013–14.

  • During the Eleventh Five Year Plan (2007–2012) about US$ 8.5 billion is expected to be invested in the ports sector, according to revised estimates of the Planning Commission of India.
  • Foreign direct investments (FDI) flows for Ports in April 2000–January 2011 stood at US$ 1,635.08 million accounting for 1.28 per cent of the total FDI inflows into the country, according to the data released by Department of Industrial Policy and Promotion (DIPP).
  • A major milestone achieved in maritime sector in the development of the country’s logistics infrastructure is India’s first International Container Transshipment Terminal (ICTT) being built in Kochi. It envisages development of facilities for handling mother container ships of 8000+ Twenty Feet Equivalent Units (TEUs) capacities. The facilities include 1800 metres berth and supporting handling equipments for annual throughput of 3 million TEU along with supporting infrastructure.

With the implementation of this project, the need for transshipment of Indian containers through ports of other countries will be reduced substantially thereby resulting in reduced transportation cost and time to the trade.

To further enhance International Cooperation and to strengthen cultural ties and also encourage trade and commerce between India and Sri Lanka a memorandum of understanding (MOU) for commencement of ferry services between Tuticorin and Colombo and between Rameswaram and Thalaimannar has been finalised and the proposal for signing of the MoU has been approved by the Government. The proposed ferry services would ensure mobility of people and increase trade, tourism and development activities.