Introduction
According to the Ministry of Shipping, around 95 per cent of India’s trading by volume and 70 per cent by value is done through maritime transport. India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The Indian ports and shipping industry play a vital role in sustaining growth in the country’s trade and commerce. India is the sixteenth largest maritime country in the world with a coastline of about 7,517 kms. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100 per cent under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.
India’s coastline stretches more than 7,000 km and since the country is at the crossroads of the Far East and the West, the waters around India are among the busiest in the world, giving way to a majority of the cargo ships that sail between Europe, Americas, Africa and East Asia. There are over 200 ports in India, of which 12 are considered the busiest and major ports of India. And they are Kolkata, Paradip, Visakhapatnam, Chennai, Tuticorin, Kochi, New Mangalore Port, Mormugao, Mumbai, Jawaharlal Nehru Port, Ennore, and Kandla. These ports account for 58% of the total cargo shipped through the ports in India.
According to a report published by the Centre for Monitoring Indian Economy, these 12 ports handled 277 million tonnes of cargo between April and September this year, a 2.3% increase as compared to 2012, and this figure is expected to increase to 4% in 2013-2014. The main commodities handled by the major ports are petroleum, oil, lubricants, and coal, and the freight volume of these goods is expected to increase in the years to come. The largest shipping company in India is the Shipping Corporation of India, which owns and operates approximately one-third of the Indian tonnage and services both national and international lines. When the Shipping Corporation of India was established in 1961, it had a fleet of 19 vessels, but today, it has a fleet of 79 vessels of 5.9 million metric tonnes dead weight.
Other major shipping companies in India are the Great Eastern Shipping Company, Essar Shipping, Varun Shipping, and Global Offshore Services. The Shipping Corporation of India is the largest state-owned shipping enterprise whereas the Great Eastern Shipping Company is India’s largest private sector shipping company. To enhance the attractiveness of the Indian shipping industry and to develop the maritime sector, the government of India has established the National Maritime Development Programme. The cost of developing the maritime sector is estimated at Rp 734 billion and the government of India has allowed foreign direct investments of up to 100% under the automatic route for projects pertaining to the construction and maintenance of ports.
Apart from the operation of ports, the shipping industry also looks into the construction of ships. According to Union Cabinet Minister of Shipping G K Vasan, India has the potential to be the next hub of the ship-building industry among the emerging economies. An 87% growth was witnessed in the tonnage capacity in the global shipping industry, and this growth will prove to be beneficial for ship manufacturers in India. In August 2013, Cochin Shipyard launched INS Vikrant, the first aircraft carrier built in India. The launch of this indigenous aircraft carrier has provided India with a golden opportunity to join the elite club of countries that have the capability of constructing warships in the ‘over 35,000 tonnes class’. The Indian shipping industry is not a standalone industry – it has an impact on the Indian Navy, Indian Air Force, and the oil and gas industry, to name a few. The Indian shipping industry is set to reach new heights in the coming years. In fact, port traffic at both major and non-major ports is expected to increase between 2013 and 2014. Also, the cargo capacity in India is likely to increase from 1247.5 million tonnes in 2012 to 2301.6 million tonnes by 2017.
Government Initiatives
Some of the major initiatives taken by the government to promote the ports sector in India are as follows :
- As of November 2019, projects worth Rs 13,308.41 crore (US$ 1.90 billion) were awarded in the last three years on upgradation of the major ports.
- As per Union Budget 2020-21, the total allocation for the Ministry of Shipping stands at Rs 1,800 crore (US$ 257.22 million).
- Major Port Authorities Bill 2020 was introduced in the Loksabha, which intends to provide regulation, operation and planning of major ports in India and to vest the administration, control and management of such ports upon the Boards of Major Port Authorities and for matters connected therewith or incidental thereto.
- Net profit at major ports increased from Rs 1,150 crore (US$ 178.4 million) in FY13 to Rs 3,413 crore (US$ 529.6 million) in FY18, while operating margin increased from 23 per cent to 44 per cent.
- In May 2018, Ministry of Shipping allowed foreign flagged ships to carry containers for transhipment.
- In March 2018, a revised Model Concession Agreement (MCA) was approved to make port projects more investor-friendly and make investment climate in the sector more attractive.
Achievements
Following are the achievements of the government in the past four years :
- Turnaround time at major ports stood at 64.69 hours in FY20 (till September 2019).
- Project UNNATI was started by the Government of India to identify opportunities for improvement in the operations of major ports. Under the project, 116 initiatives were identified, out of which 91 initiatives were implemented as of November 2018.
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