PORTS AND SHIPPING

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SUMMARY
  • India has 12 major ports and 64 minor ports handling Export Import cargo.
  • The total cargo handling capacity of Major ports during 2016-17 was 1065.83 MTPA.
  • In 2016-17, 57 projects worth USD 14 billion created an additional capacity of 103.52 MTPA.
  • Budget 2018-19 allocation to Ministry of Shipping stands at USD 289 million.
REASONS TO INVEST
  • Projected cargo traffic to be handled by Indian ports by 2021-22 is expected to be 1695 million metric tonnes as per the report of the National Transport Development Policy Committee (an increase of 643 million metric tonnes from 2014-15).
  • Total 2422 million metric tonnes of cargo handling capacity would be required in Indian Ports by 2021-22.
  • For this, additional cargo handling capacity of 901 million metric tonnes is required to be created in Indian Port in the next 6 to 7 years.
  • Ministry of Shipping initiated National Maritime Development Policy (NMDP) with a planned outlay of USD 15 billion.
  • Port projects involving Investment of over USD 10 billion identified for award for the upcoming five years.
  • Small port Industrial Cities and Industrial Clusters to be developed at select ports.
  • 21 Dry port projects are under development.
  • Increase trade activity and private participation in port infrastructure development.
  • Focus on the development of terminals that deal with a particular type of cargo, for eg: LNG (Liquefied Natural Gas).
  • India’s increasing integration into Global Value Chains requires a well-established port infrastructure.
STATISTICS
  • Over 7500 kilometres of coastline with 12 major and about 205 notified Non-major Ports.
  • 90% of the country's trade by volume and 70% by value is moved through maritime transport.
  • With substantial focus on capacity enhancement and infrastructure development, cargo handling capacity at major ports increased to 1065.83 MTPA in 2016-17 from 744.91 MTPA in 2012-13.
  • During 2017-18, the cargo traffic handled at major ports was 679.36 MT, an increase of 5% from 2016-17.
  • The traffic handled at non-major ports stands at 485.213 million tonnes.
  • There has been a steady decrease in average turnaround time from 87.36 hours in 2015-16 to 82.56 hours in 2016-17 and approximately 63.33 hours in 2017-18.
  • The Average Output per Ship per Berthday increased from 13156 tonnes in 2015-16 to 14583 tonnes in 2016-17 and further to approximately 14912 tonnes in 2017-18.
  • In 2016-17, 57 projects worth USD 14 billion created an additional capacity of 103.52 MTPA. Further, in 2017-18, 59 additional projects have been targeted.
  • Port led development was given a big push with the Sagarmala project, involving an investment of USD 14.06 billion covering 142 port projects.
  • 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%) .
  • 12 major ports in India handle approximately 57% of total Cargo traffic.
FDI POLICY
  • To attract investment for the growth of this sector, the Government has allowed 100% Foreign Direct Investment (FDI) in the shipping sector.
  • 100% FDI is allowed under the automatic route for projects related to the construction and maintenance of ports and harbours.
SECTOR POLICY
  • Major ports are under the jurisdiction of the Government of India and is governed by New Major Ports Authorities Bill, 2016 replacing the Major Port Trust Act, 1963.
  • Non-major ports are under the jurisdiction of the respective state government’s maritime boards.
  • In 2016, a New Berthing Policy for Dry Bulk Cargo for all major ports was rolled out in 2016 to drive higher cargo throughput from major ports.
  • A new Stevedoring and Shore Handling Policy, 2016 was implemented for all major ports with a view to increase operational efficiency of ports.
  • To increase investments into the port sector, Government revised Model Concession Agreement (MCA) for PPP projects in major ports. This includes establishment of Society for Affordable Redressal of Disputes- Ports as dispute resolution mechanism.
FINANCIAL SUPPORT

KEY PROVISIONS IN UNION BUDGET 2018-19:

  • Total allocation made to Ministry of Shipping in 2018-19 stands at USD 28 million, an increase of 20% from that in 2017-18.
  • An allocation of USD 25 million has been made towards development of major ports and USD 21 million towards minor ports.
  • To promote internal trade and reduce logistic cost, steps have been taken to improve inland water transport, with grants made to Inland Water Transport Authority of India amounting to USD 76.92 million.
INVESTMENT OPPORTUNITIES
  • Port development – the opportunity to serve the spill demand from major ports.
  • Port support services – operation and maintenance services such as pilotage, dredging, harbouring and provision of marine assets such as barges and dredgers.
  • Ship repair facilities in ports – demand for ship repair services will increase, providing opportunities to build new dry docks and set up ancillary repair facilities.
FOREIGN INVESTORS
  • AP Moller Maersk (Denmark)
  • PSA Singapore (Singapore)
  • Dubai Ports World (UAE)
  • Jan Del Nul NV (Belgium)
  • Hyundai Engineering and Construction Company Limited (South Korea)
  • Royal Boskalis Westminister NV (Netherlands)
KEY ACHIEVEMENTS
  • FDI grew 5 times in Sea Transport - from USD 0.5 billion (2010-14) to USD 2.5 billion (2014-18)
  • Total turnaround time reduced by 14% and operating margin of the major ports increased by 13%
  • 56 new projects worth INR 9,490.15 crore awarded in 2016-17, capacity addition of 103.52 Million tonnes per annum (MTPA)
  • Sagarmala Project: 173 projects at an investment of INR 4 lakh crore initiated; Six new mega ports and 26 port-rail connectivity projects identified
  • 37 National Waterways identified for development
SOURCES
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