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Ports: Nov 2012

November, 2012

India has a coastline which is more than 7,500 km long, interspersed with more than 200 ports. Most cargo ships that sail between East Asia and America, Europe and Africa pass through Indian territorial waters.

There are 13 major and about 200 non-major ports in the country. Cargo traffic at major ports in India stood at 560.2 million metric tonne (MMT) in FY12. Port traffic in India is set to rise at a compound annual growth rate (CAGR) of 12.3 per cent over FY11-FY14.

The Government has allowed foreign direct investment (FDI) of up to 100 per cent under the automatic route for construction and maintenance of ports and harbours. A 10-year tax holiday to enterprises engaged in the business of developing, maintaining and operating ports, inland waterways and inland ports.

The special economic zones (SEZs) are being developed in close proximity to several ports, thereby providing strategic advantage to industries within these zones. Demand for port allied services such as operations and maintenance, and ship repair services will increase.

Furthermore, the Government has initiated National Maritime Development Programme (NMDP), an initiative aimed at the all round development of the Indian maritime sector. The planned NMDP outlay is US$ 11.8 billion. Non-major ports are set to benefit from strong growth in India's external trade.

Strong growth potential, favourable investment climate, and sops provided by state governments have encouraged domestic and foreign private players to enter the Indian ports sector. Given the positive outlook for cargo traffic, and the resulting increase in number of vessels visiting ports, demand for ship repair services will go up. This will provide opportunities to build new dry docks and setup ancillary repair facilities.

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