India's Ports and Their Influence on Global Trade and Development

India’s maritime landscape is a pivotal player in the global trade arena, with major ports serving as vital gateways for international commerce. India has a coastline of approximately 7,500 km with 12 major and 200 non-major ports, making it the sixteenth-largest global maritime trading country. Indian ports have recently seen massive growth, with Adani Ports and Special Economic Zone Limited handling a substantial share of cargo. Major ports like Mumbai, Chennai and Kolkata are gateways into Asia and key players in connecting the East and West, facilitating seamless trade routes that bolster international economic ties. Indian seafarers, who make up 10% of the global workforce, are expected to increase their presence in the next decade. India has been a part of the whitelist of the International Maritime Organisation for a long time, which has further increased the demand for shipping companies around the world. 

Strategic importance of Indian ports

India's geography plays a pivotal role in its maritime success. With a coastline stretching approximately 7,500 kilometers, India is uniquely positioned at the crossroads of major international shipping routes in the Indian Ocean, a vital artery for global trade. This strategic location allows direct access to key markets in Asia, Africa and the Middle East, and supports India's potential to be a major maritime hub. Key Indian ports like Mumbai, Chennai and Kolkata are intrinsic gateways to the international markets that facilitate trade. Called the financial capital of India, Mumbai is a bustling city and a logistical powerhouse, handling the lion's share of India’s cargo. 

Chennai houses advanced infrastructure, handles diverse cargo and links India with Southeast Asia and beyond. Kolkata, being historically important and strategically located along the Hooghly River, is the lifeline connecting Eastern India and its neighboring countries. These ports together epitomize the commitment of India towards improving trade connectivity and efficiency. The Sagarmala Project is one such initiative that will modernize port infrastructure and improve hinterland connectivity further. Openness to technology and environmentally friendly practices has put Indian ports in a position to meet the demands of growing global trade, and this places them at the forefront in the evolving maritime landscape. 

Growth of the maritime sector in India

The Indian maritime sector is valued at approximately US$ 130 billion in 2023 and is projected to reach an estimated US$ 300 billion by 2025 (according to a report by McKinsey & Company). This expansion reflects the importance of maritime trade in India's economic landscape as the country aims to become a US$ 5 trillion economy. Factors driving this growth are the strategic geographic position of Indian ports, modernisation of port infrastructure, and the demand for shipping and logistics services. 

In essence, the sectoral contribution stands very high, as shipping alone contributes approximately US$ 95 billion and port operations roughly US$ 60 billion. Shipping alone carries over 90% of the world's goods trade and is the backbone of international commerce. India ranks third globally in providing seafarers and their workforce is bound to increase. Forecasts suggest that Indian seafarers might comprise 20% of the global maritime workforce in the ensuing decade. Logistics and supply chain management are an integral part of the maritime landscape, enabling efficiency in the movement of goods and contributing to the overall valuation of the sector. Furthermore, port operations are being modernised through initiatives like the Sagarmala Project, which aims to improve infrastructure, connectivity and operational efficiency across major and minor ports. This holistic approach is instrumental in positioning India as a key player in the global maritime trade network. 

The maritime sector cargo handling has increased phenomenally over the years. During FY24, for the first time, APSEZ crossed government-managed ports by handling a record 420 million tons (MMT) of cargo; government-managed ports handled nearly 410 MMT. This was a historical because a private operator had, for the first time within a financial year, handled more cargo than government ports. Overall, India's 12 major ports achieved their highest-ever cargo throughput of 819.4 MMT in the current fiscal, marking an exceptionally robust growth of over 783.5 MMT in FY23. This strong growth underlines the constructive role that public and private players have played in strengthening the country's maritime potential. 

Source - Ministry of Ports, Shipping and Waterways 

Impact on global trade 

India's ports serve as vital bridges connecting the nation to over 150 countries worldwide, fostering international trade and economic cooperation. These ports act as gateways for importing necessities and exporting all kinds of products manufactured in India, thus facilitating an intercontinental dynamic exchange of goods and services. In this respect, the strategic location at the crossroads of Asia and Europe provides India with natural maritime hubs that connect nations across continents, thus facilitating trade across diverse regions. Indian ports handle trade with a wide range of countries like the United States, China, Japan, the United Arab Emirates, and European nations, fostering economic partnerships and promoting world trade.  

These include Mundra and Jawaharlal Nehru Port, among others, which provide a crucial option for European countries to connect with African, Middle Eastern, and South American markets and have ushered in international trade and economic development in these regions. Indian ports are slowly emerging as centers of regional trade, drawing cargo from the neighboring countries of Nepal, Bhutan, and Bangladesh, contributing to the integration and growth of regional economies. Major ports in India handled cargo of over 700 million tonnes in 2023, with a significant portion attributed to international trade. 

Regional and global collabarations 

The increasing regional collaborations and international cooperation by India have resulted in several bilateral and multilateral trade agreements to advance port operations and facilitate international trade. Prominent among them is the Chabahar Port Agreement, which enables India to bypass Pakistan and have direct access to Afghanistan and Central Asia, reinforced by a recent 10-year contract with Iran. Besides this, the development of the West Container Terminal at the Colombo Port in association with Adani Ports will build on the transshipment options for South Asian shipping routes. Similarly, India's commitment to build up regional trade connectivity through the India-Middle East-Europe Economic Corridor utilized key ports such as Haifa in Israel to show its determination. Further, the participation of India in the Sagarmala Project has marked its commitment to upgrading the port infrastructure and promoting coastal shipping. This would also help develop an integrated transport system, emoting coastal economic zone, and consequently enhancing industrial growth and employ­ment opportunities. Cooperation with foreign ports, like the Port of Duqm in Oman and Haifa in Israel, will ensure knowledge-sharing as well as operational efficiencies. However, these collaborations are very much vulnerable to global events, including the COVID-19 pandemic and geopolitical tensions. These have been a reason for increasing diversified trade routes with other partners also. 

Conclusion: A bright future for India’s maritime sector 

In summary, India’s ports are crucial to the nation’s economic landscape, acting as vital links in the global supply chain. With a coastline of approximately 7,500 kilometers and a network of 12 major and 200 non-major ports, India is well-positioned to influence global trade positively. The modernisation of port infrastructure, coupled with strategic initiatives like the Sagarmala Project, is paving the way for India’s ambition of becoming a US$ 5 trillion economy. 

As we look to the future, it is essential for stakeholders—government, private sector, and international partners—to invest in the maritime sector. By doing so, we can harness the full potential of India’s ports, ensuring they remain competitive and efficient in the ever-evolving global trade landscape.