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January, 2012

Maritime Transport is critical for the social and economic development of a country. India enjoys a vibrant port sector comprising 12 major ports and 176 notified non-major ports. India ranks 16th among the maritime countries and has one of the largest merchant shipping fleet.

About 80 per cent of the total exports is carried by sea, out of which 60 per cent is carried through containerised cargo, highlighted Mr G K Vasan, Union Minister of Shipping, at the seminar on “Development of Ports in Tamil Nadu” in Chennai. Mr Vasan pointed that the container traffic has witnessed sizeable increase, especially in the recent years across all major ports. Containerised traffic grew at the rate 13 per cent per annum between 2005-06 and 2010-11.

The total traffic handled by Indian ports in 2010-11 was recorded at 870 million tonnes (MT), while the major ports handled 570 MT, non-major ports handled around 34 per cent of the total cargo at 300 MT. The traffic is expected to go up to around 2,495 MT by 2020. The capacity at the ports is expected to get enhanced to 3,130 MT by 2020 in order to manage the voluminous traffic well. The proposed investment during the next 10 years to create the expected capacity will be Rs 277, 000 crores (US$ 55.29 billion), Mr Vasan added.

The traffic at major ports is likely to grow at a compound aggregate growth rate (CAGR) of 8.03 per cent from 561.09 MT in 2009-10 to 1,214.82 MT by 2019-20, according to the Maritime Agenda 2020, issued by the Ministry of Shipping. To handle such magnitude of traffic, ports have identified schemes which would create a capacity to the tune of 1,459.53 MT. It is estimated that the capacity at major ports will surpass traffic by 20 per cent by 2020.

Major Investments

  • The Visakhapatnam Port Trust has lined up a mechanisation and dredging programme involving an investment of Rs 2,600 crore (US$ 518.96 million) for the next two years. The port is also developing two berths for handling thermal coal and steam coal and these are expected to be completed by March 2013
  • International Container Transshipment Terminal (ICTT) has launched a direct service to China from Kochi. The weekly direct NCS/ NCX service to China will benefit traders in India, as it would offer faster connectivity to China and the Far East, as per an ICTT release
  • The Union Government of India is considering signing a pact with neighbouring countries for development of dry ports. A dry port is an inland terminal directly connected by rail or road to a sea port, providing services for handling, temporary storage, inspection and customs clearance for international freight. These ports will be connected through roads and railways, which would help to bring down cost for traders and provide them greater access to international markets, thereby increasing trade
  • Mundra Port, which is also India's fourth largest commercial port is well equipped to handle around 20 per cent share of India's annual fertiliser imports. Mundra Port and Special Economic Zone Ltd (MPSEZ), private multi-port operator and a subsidiary of Adani Enterprises Ltd has handled a record 984,000 MT of fertilisers in November 2011, thereby making it one of the largest fertiliser handling ports in India
  • The Jawaharlal Nehru Port Trust (JNPT) will sign a memorandum of understanding (MoU) with a private sector consortium for development of Phase I of the Fourth Container Terminal at a cost of Rs 4,100 crore (US$ 818.36 million)
  • Vizhinjam Port owned by the Government of Kerala is raising more than Rs 1,600 crore (US$ 319.36 million) through bonds and institutional investors to develop India's deepest port that could even handle very large crude carriers
  • India has joined the global cruise line club with the country's first cruise ship, AMET Majesty, registered in Chennai with an Indian flag. Three cruise terminals at a cost of Rs 480 crore (US$ 95.81 million), are also being planned at Mormugao, Mumbai and Kochi

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). On back of the increasing growth in international trade, the cargo handled at Indian ports is projected to grow at 7.7 per cent per annum until 2013–14.

  • Foreign direct investments (FDI) flows for ports stood at US$ 1.64 billion during April 2000–November 2011, accounting for 1.07 per cent of the total FDI inflows into the country, according to the data released by Department of Industrial Policy and Promotion (DIPP)
  • The JNPT and the Venice Port Authority have signed an agreement to enhance cooperation between the two in the areas of port operations, port management and hinterland connections. This has created a multi-port gateway to attract maritime traffic flows from Asia to reduce the transit time between European ports and Asian countries
  • As India and Belgium have strong trade relationships, there are ample possibilities for Belgium and India to work together on Port development projects among other areas of cooperation. India and Belgium have complementary characteristics in the field of Port development. The aim of the MoU between the Ports of Chennai and Zeebrugge is to promote the exchange of ideas, technology and to take other inputs from the latter
  • 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 8,000+ twenty-foot equivalent units (TEUs) capacities. The project is a major milestone achieved in maritime sector in the development of the country’s logistics infrastructure