INDIA’S PORTS AND SHIPPING

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Context

• Adani Ports and Special Economic Zone Ltd (APSEZ)’s flagship Mundra Port set a milestone by welcoming MSC Anna, the largest container ship ever to call at an Indian port.

Mundra Port:

• India's first private port, largest container port, and largest commercial port.
• Located on the northern shores of the Gulf of Kutch near Mundra, Kutch district, Gujarat.
• Formerly operated by Mundra Port and Special Economic Zone Limited (MPSEZ) owned by Adani Group, now part of Adani Ports & SEZ Limited (APSEZ) managing several ports.
• Currently handles over 155 MT (highest in India), constituting nearly 11% of India’s maritime cargo.
• Handles nearly 33% of India’s container traffic.

History:

• The Port of Mundra is a private port and also a special economic zone.
• Incorporated in 1998 as Gujarat Adani Port Limited (GAPL), operations commenced in 2001.
• Renamed Mundra Port and Special Economic Zone Limited after merging with another entity.

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NATIONAL LOGISTICS POLICY: https://www.iasgyan.in/daily-current-affairs/national-logistics-policy

SAGARMALA PROJECT: https://www.iasgyan.in/daily-current-affairs/sagarmala-project-17#:~:text=Under%20the%20Sagarmala%20Programme%2C%20the,and%20more%20under%20their%20governance.

MAJOR PORTS IN INDIA: https://www.iasgyan.in/blogs/major-sea-ports-in-india

India’s Maritime Sector and Shipping Industry

• The maritime sector accounts for 95% of India’s trade by volume and 65% by value.

Challenges in the Functioning of Major Ports in India

In a nutshell, Existing ports face numerous shortcomings, such as outdated designs unfit for modern demands, inadequate infrastructure, poor connectivity, insufficient dredging capacity, and a lack of technical expertise and equipment.

Silver Lining: Industry Scenario

Cargo Traffic on the rise

• India has 12 major and 200 non-major/intermediate ports (under state government administration).
• Jawaharlal Nehru Port Trust is the largest major port in India, while Mudra is the largest private port.
• Jawaharlal Nehru Port becomes first 100% Landlord Major Port. Moreover, India is one of the world's top 5 ship recycling countries. 
• Amongst the Major Ports, Deendayal Port handled the maximum Cargo of 137.56 Mn Tonnes with a share of 17.6% followed by Paradip Port (17.3%), JNPA (10.7%), Visakhapatnam Port(9.4%), Mumbai Port(8.1%), Chennai Port(6.2%), SMP Haldia (6.2%), Kamarajar Port (5.6%), NMPA (5.3%), VOC Port (4.8%), Cochin Port (4.5%), Mormugao Port (2.2%) and SMP Kolkata (2.1%) during Apr-Mar, 2022-23.
• Under public-private partnerships (PPP), there are 58 projects worth ~$5 Bn (INR 40,000 Cr.) under various stages of implementation.
• The Global Maritime India Summit, 2023, one of the largest maritime summits in the world, anchored INR 10 Lakh Cr of investment making a significant stride towards achievement of ‘Amrit Kaal Vision 2047’ of INR 80 Tn investment.

Performance

• Enormous progress has been made.
• In the “major ports” capacity has more than doubled in the past decade from 745m tonnes to over 1,600m.
• Traffic at these ports, which handle more than half of India’s trade, jumped by 46% to 795m tonnes in the ten years to 2023.
• Turnaround time, or the number of hours between the arrival and departure of a cargo ship, has plummeted from 127 hours in 2010-11 to 53 hours ten years later.
• India rose from 54th in the World Bank’s “logistics performance index” a decade ago to 38th last year.

Turnaround Time

• The average turnaround time at major ports has fallen from 127 hours in 2010-11 to 53 hours as of 2021-22.
• It was nearly 200 hours in the early 1990s.

• Kolkata port’s turnaround time improved from 149 hours in 2010-11 to 83 hours in 2021-22.
• Turnaround time has more than halved in Haldia, to 51 hours. Chennai is at 53 hours.
• The Jawaharlal Nehru Port in Navi Mumbai had the fastest turnaround, of 28 hours, in 2021-22. It was at 63 hours in 2010-11, and has improved in the decade since 

Port Traffic

• Port traffic has increased in recent years.
• Major ports have added more than 100 million tonnes in additional traffic since 2014-15 to mark a 24 per cent increase.
• Port capacity has done even better by growing 83 per cent or more than 700 million tonnes (chart 3).

Government Initiatives and Policies

• The Indian government has launched initiatives like the Maritime Agenda, aiming to enhance port performance and capacity to match international standards.
• Proposed policies include setting up a Major Ports Regulatory Authority, implementing captive port policies, and encouraging public-private partnerships (PPP) through tax incentives and foreign investment.
• The Sagarmala programme seeks to bring down logistics costs by improving coastal shipping.
• The government noted that water-borne transport accounted for around six per cent of India’s transport mix.
• It is 12 per cent in the US, 34 per cent in Japan and 47 per cent in China.
• Waterways transport is cheaper than road and rail.

Roadmap for Improving Efficiency of Major Ports in India

Draft Facility Maintenance

• Ensure consistent maintenance of a minimum draft availability of 14 meters, as advised by the Inter-Ministerial Group, to accommodate larger vessels and increase port efficiency.

Dredging Policy

• Establish a clear dredging policy emphasizing competitive bidding to ensure quality assurance and efficient management of dredging requirements. Conduct long-term planning and comprehensive surveys in collaboration with specialized organizations.

Connectivity Enhancement

• Implement four-lane roads and double-line rail connectivity as recommended by the Committee on Infrastructure for swift and efficient transportation.
• Standardize and implement environmental clearances, tariff norms, and land acquisition processes to attract foreign investments.

Operational Efficiency Improvement

• Focus on expanding port capacity and enhancing operational efficiency.
• Invest in advanced cargo handling processes, mechanization of port operations, and scalability in processes to accommodate increasing volumes.

Technology Integration

• Utilize technologies like big data and advanced GPS navigation systems to optimize port operations and improve overall efficiency.

Simplification of Regulatory Regime

• Streamline the regulatory regime to make it less complex and rigid.
• Encourage vertical integration among stakeholders such as environmental agencies, rail/road transport authorities, etc., for holistic port development.

Review of Tariff Authority and Regulatory Bodies

• Review the role and necessity of Tariff Authority for Major Ports (TAMP) and other regulatory bodies to ensure competitiveness and efficiency.
• Quicken clearances, rationalize leases, and stamp duties to facilitate smoother operations.

Leverage  Sagarmala Project

• Leverage the Sagarmala project to modernize existing ports, develop new ports, enhance port connectivity, and promote port-linked industrialization and coastal community development.
• This initiative can significantly reduce transportation and logistics costs while boosting export competitiveness.

Recommendations by Niti Aayog

• Implement recommendations from Niti Aayog's Three Year Action Agenda, including-

Easing Cabotage Restrictions

• Introduce measures to ease cabotage regulations to encourage competition.
• Allow foreign vessels greater access to domestic coastal trade routes.

Eliminating Discriminatory Provisions

• Remove discriminatory provisions favoring Indian vessels over foreign vessels.
• Ensure fair competition and equal opportunities for all players in the maritime sector.

Exploring Deep-water Ports and Barges

• Explore the establishment of deep-water ports to accommodate larger vessels.
• Consider alternative options like barges to facilitate cargo movement in ports with low drafts.

Facilitating Connectivity with Hinterland Areas

• Improve connectivity between minor and non-major ports and hinterland regions.
• Enhance infrastructure and logistics networks to streamline cargo movement from ports to inland areas.
•  These measures will further enhance efficiency and competitiveness in the port sector.

Closing Remarks

• India’s maritime industry still punches below its weight globally.
• Despite some 7,500km of coastline and over 200 ports, the country accounted for only 2.4% of global container traffic in 2021.
• That is about the same as the United Arab Emirates (2.3%) and far less than Singapore (4.5%). These are not manufacturing superpowers, but they are major hubs for trans-shipment.
• India is planning a big hub at Galathea Bay in the Nicobar Islands, located near one of the world’s most important shipping routes.
• The government has also outlined its ambitions for the maritime sector by 2047. These include quadrupling overall port capacity to 10bn tonnes, becoming a leading shipbuilder and creating two new trans-shipment hubs.
• India’s trade infrastructure could improve. Its ports are not very prominent on global shipping routes.
• It also needs deeper ports to cater to bigger vessels.