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Ports in India

May, 2014


The ports and shipping industry plays a pivotal role in sustaining growth in trade and commerce and the overall development of the Indian economy. India currently ranks 16th among the maritime countries, having a long coastline of about 7,517 kilometres (km) with 13 major ports (12 government and one corporate) and about 200 non-major ports currently operating on the western and eastern coasts of the country. These ports serve as the gateways to India's international trade by sea, handling over 90 per cent of foreign trade.

During April–December 2013, Indian major ports handled 413.01 million tonnes (MT) of cargo as compared to 405.28 MT over the corresponding period in 2012, registering a growth of 1.91 per cent. The state governments have realised the strong growth potential and the increasing need for robust port infrastructure, and have consequently provided sops and a favourable investment climate which are attracting investments from private players into the sector.

The capacity of ports in India by the end of the 12th Five Year Plan is targeted to increase to 2,493.10 million tonnes per annum (MTPA) as compared to 1,245.30 MTPA at the end of the 11th Five Year Plan.

Key Statistics

The 12 state-owned ports (Kolkata, Paradip, Visakhapatnam, Ennore, Chennai, Tuticorin, Kochi, New Mangalore, Mormugao, Kandla, Mumbai and Navi Mumbai) which look after about 58 per cent of India’s external trade by volume shipped by sea, handled a combined 555.50 MT of various commodities such as crude oil, petroleum products, iron ore, coal, container cargo and fertilisers in 2013–14 as compared to 545.79 MT the previous year, registering a growth of 1.78 per cent, according to Indian Ports Association (IPA).

Kandla port, Gujarat was India’s biggest State-owned cargo handler by volume for the seventh year in a row, handling 87 MT of cargo in 2013–14. During the year, Ennore port, Tamil Nadu also posted robust volume growth of around 55 per cent at 22.12 MT as compared with 14.2 MT a year earlier, on the back of strong coal shipments.

The Indian ports sector received foreign direct investment (FDI) worth US$ 1,635.40 million between April 2000 and January 2014, according to the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce and Industry.

Recent Developments

The following are some of the latest developments and investments in the Indian ports sector are as follows:

  • Adani Port has emerged as the highest bidder to build a container terminal at the Ennore Port. While Adani will invest Rs 1,270 crore (US$ 211.11 million) to build the terminal, Ennore Port will invest around Rs 200 crore (US$ 33.25 million) on deepening the berth and providing rail connectivity.
  • The proposed Rs 5,100 crore (US$ 847.88 million) international deepwater multipurpose project at Vizhinjam, Thiruvananthapuram, has received five bids from international and national companies for the global tender floated Vizhinjam International Seaport Ltd for the development and operation of the port.
  • Ennore Port Ltd (EPL), Chennai and Ford India Pvt Ltd have signed an agreement for export of Ford cars for a period of 10 years. The agreement provides for various volume-based discounts on wharfage by EPL ranging from 5–30 per cent, to encourage more exports through EPL.
  • Clocking the fastest growth in cargo handling, Mundra Port, the flagship port of Adani Ports and SEZ Ltd (APSEZ) has registered 100 million metric tonnes (MMT) of cargo handling during 2013–14, the highest by any commercial port in India. The port has the capacity to handle over 200 MT of cargo per annum.

Government Initiatives

The Government of India has allowed 100 per cent FDI under the automatic route for port development projects. A 10-year tax holiday has been given to enterprises engaged in the business of developing, maintaining and operating ports, inland waterways and inland ports.

Twenty-three projects out of the targeted 30 projects for 2013-14 involving a total capacity addition of 116 MT were awarded up to mid-February, according to credit rating agency ICRA.

The Cabinet Committee on Economic Affairs (CCEA) has approved five projects involving an investment of over Rs 17,630 crore (US$ 2.93 billion) to increase the capacity of major ports. Of the five projects approved, four are container terminals and one is a multi-purpose cargo berth project in Mumbai port.

The Maritime Agenda 2010–2020 is an initiative of the Ministry of Shipping to outline the framework for the development of the port sector. The agenda also suggests policy-related initiatives to improve the operating efficiency and competitiveness of Indian ports.

Road Ahead

With rising demand for port infrastructure due to growing imports (crude, coal) and containerisation, it will be difficult for public ports to meet demand. This provides private ports with an opportunity to serve the spill-off demand from major ports and increase their capacities in line with forecasted new demand.

The Ministry of Shipping through its Maritime Agenda 2010-2020 has set a target capacity of over 3,130 MT by 2020, largely through private sector participation. More than 50 per cent of this capacity is expected to be created at non-major ports.

Given the positive outlook for cargo traffic, and the resulting increase in number of vessels visiting ports, demand for ship repair services will also go up. This will provide opportunities to build new dry docks and set up ancillary repair facilities. The planning Commission of India in its 12th Five Year Plan expects a total investment of Rs 180,626 crore (US$ 30.01 billion) in the ports sector.

Exchange Rate: INR 1 = US$ 0.01661 as on April 07, 2014

References: Media Reports, Press Releases.