Indian Ports: Powerhouse of economic growth
Since they facilitate 95% of India’s trade by volume and 70% by value, ports in India are playing an active role in the country’s economic growth; they are being equipped with technology like artificial intelligence with an aim to optimize operations and boost efficiency
As India is speedily modernising its ports with an aim to improve their efficiency in handling cargos and ships, the country’s policy makers are on the moon as it has moved up the ranks to 22, from 44 in 2018 in the international shipment category.
India has also climbed four places to rank 48 in logistics competence and equality--all this in tune with Maritime India Vision 2030, which, among other things, envisages safe and sustainable world class ports to address growing trade volume needs.
In 2022-23, India’s major ports, as per Union Minister Sarbananda Sonowal, handled the highest-ever cargo at 795 million metric tons, registering an increase of 10.4% over the previous year. India’s major ports—running from West to East, include Deendayal (Kandla) Port, Mumbai Port, Jawaharlal Nehru Port, Mormugao, New Mangalore, Cochin, Tuticorin, Chennai, Ennore, Visakhapatnam, Paradip and Kolkata.
In a few years, the country will join a group of select nations with ports to handle larger vessels after the development of Vadhavan Port in Palghar district of Maharashtra. Going to be the country’s largest deep draft port, Vadhavan Port will have a natural draft of 20 meters, allowing to handle bigger vessels and container ships. The world’s largest container handling modern deep ports require a draft of 18-20 meters.
Vadhavan Port on completion, it is believed, will make India fully ready to meet the additional demand that will be generated on account of the planned India-Middle East-Europe Economic Corridor (IMAC).
Ports and industrial growth
Ports being gateways of international trade have made maritime (coastal) states a preferred site of industrial location in the country. Due to this, states like Maharashtra, Tamil Nadu, West Bengal, Odisha, Gujarat, Andhra Pradesh, Kerala have contributed significantly to the country’s growth story.
According to Annual Survey of Industries (ASI) data for 2019-20, Gujarat contributes 15.85 % in India’s gross value added. (GVA is an economic productivity metric that measures the contribution of a corporate subsidiary, company, or municipality to an economy, sector, or region). This is followed by Maharashtra (14.53%), Tamil Nadu (11.04%), and Karnataka (7.16%).
Reduction in transport cost, time, and bottlenecks as well as logistic costs of logistic intensive industries are some of the main factors driving industrial development in port locations.
Sectors such as power, refineries & petrochemicals, cement, steel electronics, apparel, leather, furniture, and food processing are some of the clusters identified for development in port areas.
Ports and SEZs
Special Economic Zones have indisputable preference for ports with 240 of the 377 SEZs in the country are located in maritime states.
At the sub-state level i.e., at the level of districts with major and minor cargo ports, 23 percent SEZs are located in port districts. These port districts account for 61.50% of the total SEZ area in the country.
Port location attracts large size SEZs. Gujarat is frontrunner in having such large sized SEZs. The state has one major port, Kandla port and 48 minor ports. Kandla port (known as Deendayal port), located in Kutch district of Gujarat, handles maximum cargo in the country.
Eleven of the 25 SEZs in Gujarat are located in port districts covering 95.19 % SEZ area in the state. Adani Port Ltd, the largest SEZ in the country is located at Mundra port (minor port) in Kutch district of Gujarat.
Having an area of 8234.18 ha, the SEZ alone covers 21% of the total SEZ area in the country. The other notable SEZs in Gujarat in port districts include Kandla SEZ (Kutch), Sterling and Dahej (Bharuch), and Reliance SEZ (Jamnagar).
India has a long coastline of 7517 km that covers 9 states and 4 union territories. Across the gigantic coastline, there are 12 major and 212 minor ports. 95% of India’s trade by volume and 70% by value is facilitated through these ports.
Since the launch of the Sagarmala programme in 2015, port-led development has received a significant push. Of the total 802 projects earmarked for Sagarmala programme as on March 2022, 221 projects worth Rs 1.12 lakh crore have already been completed, while 581 projects worth Rs 4.28 lakh crore are under various stages of development.
The speed is being provided to various infrastructure projects through the PM Gati-Shakti National Master Plan launched in 2021. The PM Gati-Shakti focuses on coordinated planning and execution of multi modal connectivity projects that include ports as well.
Private participation is the main strategy of port-led development. In this regard, all the projects of more than Rs 100 crore investment are listed under National Infrastructure Pipeline (NIP). NIP is operated through India Investment Grid, a web-based system that gives real time information of various projects. The Ministry of Ports is also targeting financing of NIP through the National Monetisation Pipeline that include monetisation of its 81 projects through Public Private Partnership (PPP) mode.
To increase the competitiveness of the supply chain, efforts are being made to incorporate modern technology into port operations. Some of the steps taken in this direction include digitization of key EXIM processes such as electronic invoice, electronic payment and setting up RFID (Radio Frequency Identification) technology at port gates as well as creation of National Logistic Portal and Logistic Data Bank.
While digitization helps in seamless exchange of EXIM documents and transactions, Logistic Data Bank helps in getting near real time information on container cargo movement by integrating the IT infrastructure of various stakeholders such as ports, customs, trains, internal container depots-- across the supply chain.
*** The writer is an Assistant Professor at New Delhi-based Institute for Studies in Industrial Development; views expressed here are her own