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October, 2012


The Indian Shipping segment, with 187 minor ports and 13 major ports spread across nine maritime states, is poised to mark exponential growth in the years to come. While the Government is geared up to attract international investors by allowing 100 per cent foreign direct investment (FDI) in the industry, it has also embarked on public-private partnership (PPP) route for modernisation and expansion of the Indian ports.

The Indian port capacity crossed the mark of 1 billion tonne in 2011. Moreover, the national maritime agenda envisages an expansion of total port traffic from current 800 million tonnes (MT) to about 2,500 MT by 2020. Alongside, the agenda projects total capacity, of all ports together, to raise from current 900 MT to 3,130 MT.

To achieve the desired results, Ministry of Shipping is making all possible efforts and providing funding. It has decided to invest Rs 73,793.95 crore (US$ 13.76 billion) for development of various projects in the sector during the 12th Five year plan. According to the plan, the annual capacity of major ports would expand to 1229.24 MT by the end of March 2017.

Indian Shipping Industry Goes Global

As the Government of India is determined to get Indian shipping industry at par with the global standards, it is in continuous discussions with its peers across the world to achieve the growth targets.

India and Austria have recently inked a Memorandum of Understanding (MoU) on Technology Cooperation in the Shipping and Ports Infrastructure wherein Austrian expertise could prove quite instrumental for the Indian sector. New technologies for implementation of International Ship & Port Security code, use of radio frequency identification in logistics and transport planning and optical character recognition in terminals to speed up the processing of containers in and out were certain areas involved in the agreement.

The Ministry of Shipping expects that the bi-lateral co-operation would enable Indian organisations to acquire appropriate know-how, scientific knowledge and research and development (R&D) capabilities from the European country.

Moreover, India has recently shown interest to adopt new technology regarding decongestion of ports; information technology for the movement of container traffic and maritime training from Germany. Also, owing to 100 per cent FDI being permitted in the sector, the German firms are also keen to invest in Indian companies as India is increasingly emerging as a logistics hub and cruise destination.

Sri Lankan Government-owned Sri Lanka Ports Authority (SLPA) is in talks with Indian port companies to form strategic alliances to invest in Indian port projects (such as the fourth container terminal at JNPT and others).

Recent Developments

  • Adani Ports and Special Economic Zone (SEZ)'s subsidiary, Adani Kandla Bulk Terminal Pvt Ltd, has inked a concession agreement with the Kandla Port Trust to establish a dry bulk terminal at the Kandla port on build, operate, transfer (BOT) basis. The project, estimated at cost of Rs 1,200 crore (US$ 224 million), is anticipated to be completed in 2013 and the terminal therein would have a capacity to handle 20 MT of cargo
  • Dempo Group controlled Dempo Shipbuilding & Engineering has acquired 74 per cent stake in Gujrat-based Modest Infrastructure Ltd. A shipbuilding and ship repairs company, Modest Infrastructure counts its forte in building sophisticated vessels such as product tankers, cement carriers, offshore supply and survey vessels
  • The Dubai Government-owned DP World Pvt. Ltd and state-run Cochin Port Trust have commenced discussions with international shipping firms to begin operations from the Vallarpadam trans-shipment terminal at Cochin port. The development took place when the Government relaxed cabotage rules for export containers transhipped to and from the terminal. Cabotage is the transport of goods between two points in the same country by a vessel registered in another country
  • India's first corporate port, Ennore Port Ltd, is all geared up to issue tax-free bonds to raise around Rs 1,000 crore (US$ 186.44 million), for its expansion and infrastructure projects. The investment chart includes infrastructure building including berth, LNG terminal, car terminal, dredging and others. These projects would help the port increase cargo handling capacity to 90 MT by 2020. Besides that the port is also planning to come up with an initial public offering (IPO) by 2014