Ports and Shipping

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Summary

India comprises a significant size maritime sector with 12 Major and 200+ Non-Major Ports situated along its 7500 km long coastline and a vast network of navigable waterways. *
Ports in India handle approximately 95% (by volume) and 68% (by value) of India’s external trade. *
India has 12 over government-owned ports and about 200 minor and intermediate ports.*

Reasons to Invest

There are 802 projects worth investment of INR 5.40 lakh cr. for implementation under the Sagarmala Programme by 2035.*
India is strategically located on the world’s shipping routes with a long coastline of about 7,517 km and over 200 major and minor ports, he said “these ports play an important role in India’s economy.” *
Ministry of Ports, Shipping and Waterways has awarded 31 projects of more than INR 14,600 crore on PPP till FY25 and look forward for an enthusiastic response from the stakeholders. *
As part of Maritime India Vision 2030, a Total of 963 initiatives have been identified for implementation across major ports with an estimated investment of INR 6,77,720.24 crores. *
The percentage of cargo handled at all Major Ports through PPP operators is targeted to be 85% by year 2030.*
By 2030, all the Major Ports are to be made fully self-sustainable on electricity. *
MIV 2030 estimates the investments to the tune of INR 1,00,000–1,25,000 Crores for capacity augmentation and development of world-class infrastructure at Indian Ports.*
National Centre of Excellence for Green Port & Shipping (NCoEGPS) aims to provide support to MoPSW in developing and maintaining a policy and regulatory framework for a green alternative technologies road map for the shipping sector in India for its transition to carbon neutrality and CE principles.*
Vision 2047: Port handling capacity to be raised by 4X.*

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Key Achievements

Under the Sagarmala Programme, 143 projects were completed, while 190 projects worth INR 2.12 lakh cr have been awarded and are under implementation. * Eight Floating Jetty projects, 4 each in Tamil Nadu and Karnataka Sanctioned under Sagarmala Programme. *
Quality service delivery Turnaround Time (containers) at Ports comes down to 26.58 hours from 44.70 hours in 2013-14.
Jawaharlal Nehru Port Authority set a global benchmark in handling of cargo container, with a TAT of 22 hours which has put India amongst the top performers.*
As per World Bank's LPI 2023 report, India's ports' efficiency and productivity has increased with better 'turn around time.'*
Coastal shipping traffic grows from 74.9 MMTA in 2014 to 133 MMTPA in 2022.*
Jawaharlal Nehru Port becomes first 100% Landlord Major Port.*

Recent Announcements

26th August 2023: Major step of MoPSW towards Public-Private Partnership with Rs. 4,243.64 crore Mega Terminal Project at Kandla, Gujarat.

24th August 2023: Inland Waterways Authority of India (IWAI) signs MoU with Numaligarh Refinery Ltd (NRL) for export of Petroleum Cargo via NW 2 & IBPR.

24th August 2023: Ministry of Ports, Shipping and Waterways (MOPSW) developing Next-Gen Container Terminal at Tuna Tekra, Gujarat.

14th August 2023: West Bengal to receive investment of INR1 Trillion in maritime sector; transforming it into a regional trade hub in near future: Shri Sarbananda Sonowal.

10th Aug 2023: Paradip Port Authority (PPA) becomes fastest Major Port to handle 50 MMT Cargo in current fiscal.

Statistics

Approximately 95% of the country’s trade by volume and 68% by value is moved through Maritime Transport.*
There are 12 government owned ports in India, 6 are located on East coast, 6 on the West Coast. *
Coastal Shipping Traffic stands at 151 MMTPA in 2022-23.*

Growth Drivers

Maritime India Vision (MIV) 2030 aims for investments around INR 1,00,000–1,25,000 cr for development of world-class global standard ports. *
MOPSW had identified 101 projects estimated to cost around INR 62,627 crore under GatiShakti NMP which are aimed to be completed by 2024, while the target for the nine high-impact projects costing INR 1,913 crore is by the end of this fiscal year.*
The Mumbai International Cruise Terminal, the iconic sea cruise terminal coming up at BPX-Indira Dock, is expected to be commissioned by July 2024. The terminal will have a capacity of handling 200 ships and 1 million passengers per annum. *
As per the National Hydrogen Mission all Major Ports by 2035 will have Green Hydrogen / Ammonia bunkers and refueling facilities.*
In order to promote Inland Water Transport (IWT) in the country, 111 waterways (including 5 existing and 106 new) have been declared as National Waterways (NWs) under the National Waterways Act, 2016. *
GOI aims to integrate National Logistics Portal (NLP) with Unified Logistics Interface Platform (ULIP) to make the Multi Modal Logistics Ecosystem more Efficient. *
24 Digital Systems of 6 Ministries are being integrated through ULIP. This will create a National Single Window Logistics Portal to provide real time monitoring of cargo while ensuring data confidentiality with end-to-end encryption, comprehensive reduction in logistics cost. *
Clear and robust pipeline of 81 projects of more than INR 42,400 crore to be awarded on PPP till FY25.*
Government sanctioned following projects for development of the Inland Water Transport (IWT) infrastructure on National Waterways in the North-Eastern Region (NER) for a period of 5 years from 2020-21 to 2024-25 *
(i) NW-2 (Dhubri-Sadiya stretch of river Brahmaputra) at the cost of INR 461 Crore; and
(ii) NW-16 (river Barak) & Indo-Bangladesh Protocol (IBP) route at the cost of INR 145 Crore.
The Ministry of Ports, Shipping & Waterways has identified 81 Public Private Partnership (PPP) Projects (value INR 42,300 Crore) till financial year 2024-25 for developing major ports’ berths, terminals, oil jetties, etc. *
MoPSW has already identified a project pipeline up to FY 2025 with 13 projects, for FY 2022 (INR 6954 Crores) already approved by the MoPSW followed by 24 projects of value ~INR 12,550 targeted for award in FY 2023. Further, 44 projects of value ~INR 23,000 crore are scheduled for award in FY 2024 and FY 2025.*
Oil jetty no.7 will enhance the liquid handling capacity, by 2.00 MMTPA, of mainly edible oil, and fulfil the future requirements and will reduced the Turn-around time of the vessels.*

FDI Policy

The Government of India allows 100% FDI under the automatic route for port development projects. *
The cumulative FDI equity inflow in the Port industry is USD 1.63 bn during the period April 2000 to March 2023. *
The cumulative FDI equity inflow in the Sea Transport is USD 5.45 bn during the period April 2000 to March 2023. *

Sector Policy

Sagarmala Programme *

Sagarmala Programme 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:
- Port Modernization
- Connectivity enhancement
- Port led Industrialization
- Coastal Community Development
The Sagarmala Project has the following aims:
- 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 the cost of transporting domestic cargo by optimising the modal mix
As a part of Sagarmala Programme, more than 800 projects at an estimated cost of around 5.5 lakh crore have been identified for implementation during 2015 to 2035 across all coastal states an Eastern and Western side of the country.*
Ministry has sanctioned financial assistance of INR 27 cr and released INR 6.14 cr towards balance payment of the second instalment to Chennai Port Trust for Development of Paved Storage for handling export cargo. *
More than 504 projects have been identified to unlock the opportunities for port-led development and these initiatives are expected to mobilize more than 3.57 lakh crore of infrastructure investment.
The Sagarmala scheme encompasses projects worth INR 5.48 lakh crores, out of which 194 projects worth INR 99,000 crores have been completed and 217 projects worth INR 2.12 lakh crores are under implementation as on 31st March 2022.
About 119 Projects worth more than INR 1 Lac Cr. have been identified under Sagarmala Programme in the state of Andhra Pradesh for enhancing the infrastructure related to Port led Industrialization, Port Modernization, Port Connectivity Enhancement, Coastal Community Development & Coastal Shipping and Inland Waterways.
131 projects worth INR 1.05 lakh crore identified under Sagarmala in Maharashtra State and out of which 33 projects are completed.

Coastal Berth Scheme *

The scheme aims to provide financial support to ports/state governments for the creation of infrastructure for the movement of cargo/passenger by sea or National Waterways. This scheme was integrated under the Sagarmala Programme

Major Port Authorities Bill, 2020 *

The bill was introduced in Lok Sabha in March 2020 with an aim to replace the Major Port Trusts Act, 1963.
The bill aims to decentralize decision making and infuse professionalism in the governance of ports. It will also help bring transparency to the operations of various ports.

Recycling of Ships Act, 2019 *

The Recycling of Ships Act, 2019 provides for the regulation of the recycling of ships by setting certain international standards and laying down the statutory mechanism for enforcement of such standards.

SAROD-Ports: *

SAROD-Ports was launched on 10 September 2020 by Shri Mansukh Mandaviya, MOS(IC) Shipping. These ports are for affordable and timely resolution of disputes in a fair manner and enrichment of Dispute Resolution Mechanism with the panel of technical experts as arbitrators.
This institution will promote ease of doing business in the maritime sector because of the fast, timely, cost-effective and robust dispute resolution mechanism.

Merchant Shipping Bill *

The envisioned advantages of the Merchant Shipping Bill, 2020 are promoting ease of doing business, embracing digital technology and increasing tonnage and Vessel as a Tradable Asset.
Ministry of Ports, Shipping and Waterways has circulated a draft of the Indian Ports Bill 2020 for public consultation which will repeal and replace the Indian Ports Act, 1908 (Act No. 15 of 1908).

Subsidy support to Indian shipping companies *

A scheme for the promotion of flagging of merchant ships in India by providing INR 1624 crore over a period of five years as subsidy support to Indian shipping companies in global tenders has been approved by the Cabinet.
The rate of subsidy support will be based on age of the vessel.

Ship Building Financial Assistance Policy (2016-2026) *

Vessels for which the construction commences subsequent to the signing of valid contracts shall be eligible for grant of financial assistance. Vessels which are constructed and delivered within a period of three years from the date of the contract are eligible for availing financial assistance under the policy.
For specialized vessels, the delivery period can be extended till six years. Financial assistance shall be @ 20% of the contract price, actual receipts, fair price (whichever is least) to Indian shipyards.
Under the policy, the financial assistance extended would be reduced by 3% every three years.

Draft Guidelines for Operationalization of Ro-Ro and Ro-Pax ferry service along the coast of India*

The guidelines encompass the two aspects of ferry operation namely; concessions for terminal operation and license for operation of Ro-Pax vessels.*
These guidelines will homogenize and streamline the development and operations of ferry services, along with, promoting ease of doing business by eliminating unnecessary delays, disagreements and introducing digital interventions at customer interface. They will also help State/UT Governments and Port Authorities in implementation of such projects by standardization of procedures. Further, it will help in instilling confidence among the private players thereby increasing their participation and promoting healthy competition in such projects.*

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Financial Support

CONCOR has announced a volume-based rebate scheme of upto 100% on rail tariff w.e.f. 01.09.2021 for movement of empty containers from Ports to Hinterland for its further utilization in exports to resolve the issue of shortage of containers at the port. *