PORTS AND SHIPPING

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SUMMARY
  • India has 121 major ports and around 2002 minor ports.
  • The total cargo handling capacity of Major ports during 2017-18 was 1451.2 Million Metric Tonnes Per Annum (MMTPA).3
  • Ports in India handle more than 90%4 (by volume) and 72%5 (by value) of India’s external trade.
REASONS TO INVEST
  • The Ministry of Shipping strives to increase the overall port capacity to 3500+ million metric tonnes per annum (MMTPA) to cater to projected traffic of 2500 MMTPA by 2025.6
  • The capacity addition at ports is expected to grow at a CAGR of 5-6% till 2022, adding 275-325 million metric tonnes (MMT) of capacity.7
  • India’s cargo traffic handled by ports is expected to reach 1,695 MTPA by 2020.8 
  • The National Maritime Development Programme (NMDP) has been formulated by the Ministry of Shipping. The total investment involved under the programme is US$ 14.3 bn.9
  • Port projects involving investment of over US$ 10 bn identified for award for the upcoming five years.
  • An integrated and comprehensive plan for port-led industrialization has been developed. The plan combines the growth potential of port-linked industries with the competitive location for each industry. The port-led industrialization program is going to be delivered through Coastal Economic Zones (CEZs) and industrial clusters. Each CEZ will consist of multiple industrial clusters categorised under energy, material and discrete industries.10
  • 91 initiatives under Project Unnati, to improve the efficiency and productivity of the major ports, have been implemented. These initiatives will unlock around 80 MMTPA capacity.11
  • India’s increasing integration into Global Value Chains requires a well-established port infrastructure.
STATISTICS
  • India is the 16th largest maritime country in the world, with a coastline measuring more than 7500 km.12
  • The cargo handling capacity of Major Ports stands at 1451.19 MMTPA in 2017-18.13 This is a 385.36 MMTPA increase from the 2016-17 value of 1065.83 MMTPA.
  • During 2017-18, the cargo traffic handled at major ports was 679.36 MMTPA, an increase of 5% from 2016-17.14
  • Traffic handled at Major Ports in April 2019 was 60 MMTPA. The value in April 2018 was 56 MMTPA.15
  • The traffic handled at non-major ports, for 2016-17, stands at 485.2 MMTPA.16
  • Cargo handled at ports during the period April’2017- January’ 2018: Petroleum, Oil and Lubricants (33.74%, followed by Container (19.70%), Thermal & Steam Coal (13.72%), Other Misc. Cargo (12.09%), Coking & Other Coal (7.60%), Iron Ore & Pellets (6.72%), Other Liquid (4.15%), Finished Fertilizer (1.17%).
FDI POLICY
The Government of India allows 100% FDI under the automatic route for port development projects.17
SECTOR POLICY

Sagarmala

  • Sagarmala aims to change India’s logistics sector performance, by unlocking the full potential of India’s coastline and waterways. Various projects have been initiated under the Sagarmala project:18
    • Port connectivity enhancement
    • Port connectivity enhancement
    • Coastal Community Development
  • The Sagarmala Project has the following aims:19
    • Reduce logistic cost for export import (EXIM) and domestic trade with minimal infrastructure investment
    • Optimise cost of EXIM container movement
    • Lower the logistics cost of bulk commodities by locating future industrial capacities near the cost
    • Improve export competitiveness by developing port proximate discrete manufacturing clusters
    • Reduce cost of transporting domestic cargo through optimising modal mix
  • The Sagarmala Project is predicted to mobilise infrastructure investments worth US$ 5.7 bn by 2025.20 It is predicted, that by 2025, the estimated logistics cost saving per annum will be US$ 5-5.7 bn.21

Coastal Berth Scheme 

  • The scheme aims to provide financial support to ports/state governments for the creation of infrastructure for movement of cargo/passenger by sea or National Waterways.22

Major Port Authorities Bill, 2016

  • The bill aims to decentralize decision making and infuse professionalism in governance of ports. It will also help bring transparency in operations of various ports.23

Revamped Merchant Shipping Bill, 2016

  • The bill replaces the Merchant Shipping Act of 1958. The bill aims to promote ease of doing business to meet new challenges that the merchant shipping sector faces. The act will; (i) safeguard rights and privileges of seafarers; (ii) enhance safety and security of vessels and life at sea; and (iii) develop Indian coastal shipping and trade.24
  • To increase investments into the port sector, the Government revised the Model Concession Agreement (MCA) for PPP projects in major ports. This includes the establishment of the Society for Affordable Redressal of Disputes- Ports as a dispute resolution mechanism.
FINANCIAL SUPPORT

Key Provisions in Union Budget 2019-20

  • Total allocation made to Ministry of Shipping in 2019-20 stands at US$ 272 mn.25
  • Total capital expenditure allocation in the union budget 2019-20 stands at US$ 38.1 mn.26
  • Total budget allocation towards the development of major ports stands at US$ 14.08 mn and is US$ 15.7 mn for minor ports.27
  • An allocation of US$ 78.7 mn has been made towards the Sagarmala Projects.28
  • The total allocation towards inland water transport stands at US$ 108.3 mn.29

For further details about the budget allocation for the Ministry of Shipping, please log onto Budget Allocation for Ministry of Shipping.

INVESTMENT OPPORTUNITIES
  • Shipbuilding
  • Ship repair
  • Ship recycling
  • Development of inland waterways and inland water transport
  • Port and harbour construction projects
  • Port and harbour maintenance projects
FOREIGN INVESTORS
  • AP Moller Maersk (Denmark)
  • PSA Singapore (Singapore)
  • Dubai Ports World (UAE)
  • Hyundai Engineering and Construction Company Limited (South Korea)
KEY ACHIEVEMENTS
  • Under the Sagarmala Programme, 89 projects were completed, while 443 projects worth US$ 617.9 bn are under various stages of implementation and development.30
  • The average turnaround time (in hours) reduced to 60.48 hours (up to 31 October 2018) from 64.32 hours in 2017-18.31
  • The average output per ship berth has increased to 16,166 (up to 31 October 2018) from 15,333 in 2017-18.32
  • Six new port locations – viz Vadhavan (Maharashtra), Enayam (Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour (Odisha), Sirkazhi (Tamil Nadu) and Belekeri (Karnataka) have been identified to increase overall cargo handling capacity.33
  • More than 50 projects with an investment of US$ 1.4 bn and involving capacity addition of 90 MMTPA are being awarded during 2018-19.34
SOURCES
  1. “National Informatics Centre”, Major Ports in India,  https://community.data.gov.in/major-ports-in-india/, accessed on 29 May 2019
  2. “Ministry of Shipping, Sagarmala”, Port Modernization & New Port Development, http://sagarmala.gov.in/project/port-modernization-new-port-development, accessed on 29 May 2019
  3. “Ministry of Shipping”, Cargo Handling Capacity of Major Ports Increased by Over 650 MMT, http://pib.nic.in/newsite/PrintRelease.aspx?relid=186623, accessed on 29 May 2019
  4. “Ministry of Shipping, Sagarmala”, Port Modernization & New Port Development, http://sagarmala.gov.in/project/port-modernization-new-port-development, accessed on 29 May 2019
  5. “Ministry of Shipping”, Sagarmala National Perspective Plan, http://sagarmala.gov.in/sites/default/files/20161222_Sagarmala_final%20report_volume%2003_0.pdf, accessed on 29 May 2019
  6. “Ministry of Shipping”, Year End Review 2018 – Ministry of Shipping, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1555877, accessed on 29 May 2019
  7. “Ministry of Shipping, Indian Ports Association”, Final Report for Sagarmala (Vol. 1), http://sagarmala.gov.in/sites/default/files/20161222_Sagarmala_final%20report_volume%2001_0_0.pdf, accessed on 29 May 2019 
  8. “Ministry of Shipping, Indian Ports Association”, Final Report for Sagarmala (Vol. 1), http://sagarmala.gov.in/sites/default/files/20161222_Sagarmala_final%20report_volume%2001_0_0.pdf, accessed on 29 May 2019
  9. “Ministry of Shipping”, National Maritime Development Programme, http://pib.nic.in/newsite/PrintRelease.aspx?relid=133484, accessed 29 May 2019
  10. “Ministry of Shipping, Indian Ports Association”, Final Report for Sagarmala (Vol. 1), http://sagarmala.gov.in/sites/default/files/20161222_Sagarmala_final%20report_volume%2001_0_0.pdf, accessed on 29 May 2019
  11. “Ministry of Shipping, Sagarmala”, Port Modernization & New Port Development, http://sagarmala.gov.in/project/port-modernization-new-port-development, accessed on 29 May 2019
  12. ”Ministry of Shipping”, Background, http://sagarmala.gov.in/about-sagarmala/background, accessed on 29 May 2019
  13. “Ministry of Shipping”, Cargo Handling Capacity of Major Ports Increased by Over 650 MMT, http://pib.nic.in/newsite/PrintRelease.aspx?relid=186623, accessed on 29 May 2019.
  14.  “Parliament of India”, Cargo Handling at the Major Ports, http://164.100.47.5/committee_web/ReportFile/20/109/269_2018_12_18.pdf, accessed on 29 May 2019
  15. “Indian Ports Association”, Traffic Handled at Major Ports, http://www.ipa.nic.in/index, accessed on 29 May 2019
  16. “Indian Port Association”, State Wise Traffic Handled at Non-Major Ports, http://www.ipa.nic.in/WriteReadData/Links/State-wise%20traffic%20handled%20at%20portsea7965ce-8715-4924-8b9a-f3fd6e9d7a1a.pdf, accessed on 29 May 2019
  17. “Ministry of Shipping”, FDI in Ports Sector, http://pib.nic.in/newsite/PrintRelease.aspx?relid=103354, accessed on 29 May 2019
  18. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  19. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  20. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  21. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  22. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  23. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  24. “Ministry of Shipping”, Launch of Sagarmala Programme, http://pibarchive.nic.in/ndagov/Comprehensive-Materials/compr14.pdf, accessed on 29 May 2019
  25. “Ministry of Shipping”, Ministry of Shipping, https://www.indiabudget.gov.in/ub2019-20/eb/sbe87.pdf, accessed on 29 May 2019
  26. “Ministry of Shipping”, Ministry of Shipping, https://www.indiabudget.gov.in/ub2019-20/eb/sbe87.pdf, accessed on 29 May 2019
  27. “Ministry of Shipping”, Ministry of Shipping, https://www.indiabudget.gov.in/ub2019-20/eb/sbe87.pdf, accessed on 29 May 2019
  28. “Ministry of Shipping”, Ministry of Shipping, https://www.indiabudget.gov.in/ub2019-20/eb/sbe87.pdf, accessed on 29 May 2019
  29. “Ministry of Shipping”, Ministry of Shipping, https://www.indiabudget.gov.in/ub2019-20/eb/sbe87.pdf, accessed on 29 May 2019
  30. “Ministry of Shipping”, Year End Review 2018 – Ministry of Shipping, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1555877, accessed on 29 May 2019
  31. “Ministry of Shipping”, Year End Review 2018 – Ministry of Shipping, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1555877, accessed on 29 May 2019
  32. “Ministry of Shipping”, Year End Review 2018 – Ministry of Shipping, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1555877, accessed on 29 May 2019
  33. “Ministry of Shipping”, Year End Review 2018 – Ministry of Shipping, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1555877, accessed on 29 May 2019
  34. “Ministry of Shipping”, Year End Review 2018 – Ministry of Shipping, http://pib.nic.in/PressReleaseIframePage.aspx?PRID=1555877, accessed on 29 May 2019
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