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Indian Ports Analysis

August, 2014

India has 13 major ports and about 200 non-major ports. Most cargo ships that sail between East Asia and America, Europe and Africa pass through Indian territorial waters. Cargo traffic in 2013 was 933.7 million metric tonnes (MMT) and is expected to reach 1,758 MMT by 2017.

India's total external trade is estimated to have grown to US$ 765 billion in FY14, implying a compound annual growth rate (CAGR) of 14.9 per cent since FY06. Ports handle almost 95 per cent of trade volumes; thus, rising trade has contributed significantly to cargo traffic.

The Government of India has allowed foreign direct investment (FDI) of up to 100 per cent under the automatic route for projects related to the construction and maintenance of ports and harbours. A 10-year tax holiday is extended to enterprises engaged in the business of developing, maintaining, and operating ports, inland waterways, and inland ports. The government has also initiated National Maritime Development Programme (NMDP), an initiative to develop the maritime sector with a planned outlay of US$ 11.8 billion.

Given the positive outlook for cargo traffic, and the resulting increase in the number of vessels visiting ports, demand for ship repair services will go up. This will provide opportunities to build new dry docks and set up ancillary repair facilities.

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