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04-November-2023-Special-Article
November 4, 2023 @ 7:30 am - 11:30 pm
PORT INFRASTRUCTURE IN INDIA
Port infrastructure plays a pivotal role in the economic development of a nation. It serves as a crucial facilitator for international trade, employment generation, reduction of logistics costs, and the enhancement of the blue economy. India, with its vast coastline, has been focusing on developing port infrastructure to promote ‘Port-led Development.’
Current Status of Port Infrastructure
Institutional Arrangement:
India has 13 Major Ports managed by the Central Government under the Major Ports Authorities Act 2021.
Minor Ports are administered by State governments through State Maritime Boards, although the Union Government retains overriding powers.
Trade Handling:
Over 95% of India’s trade by volume and 65% by value relies on maritime transport facilities at ports.
Major ports had a capacity of 1,598 million tonnes per annum (MTPA) in FY22.
Turnaround time has reduced from 82.32 hours in FY17 to 62.16 hours in FY21.
Non-major ports accounted for 45% of the total cargo traffic in FY22, indicating a shift from major to non-major ports.
Significance of Developed Port Infrastructure
Facilitating International Trade:
In FY 2020-21, major ports handled 704.8 million tonnes of cargo, including coal, crude oil, iron ore, and containers.
Employment Generation:
The port sector has the potential to create around 40 million direct and indirect jobs in India by 2025.
Logistics Cost Reduction:
Promoting coastal shipping and inland waterways can significantly reduce the logistics cost, enhancing trade competitiveness.
Boosting Blue Economy:
Developed port infrastructure supports the export of marine products, making India one of the world’s top producers of fish.
National Security:
Ensures the security of strategic installations located near ports and helps control illegal practices like drug trafficking and maritime piracy.
India as a Net Security Provider:
Port development can serve as a hub for the coastal development of other South Asian countries, countering the coercive nature of China’s BRI project.
Environmental Protection:
Addresses challenges of overfishing, coastal degradation, marine pollution, and rising sea levels.
Development of Coastal Communities:
Promotes sustainable livelihoods in the fisheries sector, leading to the inclusive development of coastal communities.
Challenges with Port Infrastructure
High Turnaround Time:
Indian ports still have relatively high turnaround times, affecting their competitiveness compared to global standards.
Underdeveloped Infrastructure:
Major ports operate at only 65% capacity due to insufficient container tonnage, lack of handling equipment, navigational facilities, and poor connectivity.
Land Acquisition Issues:
Land acquisition for port expansion projects has been challenging, leading to significant delays.
Complex Customs Procedures:
Complex customs procedures and lengthy documentation processes add to transportation costs.
Regulatory Confusion:
Lack of a unified regulatory body and overlapping jurisdiction among different agencies create regulatory uncertainty.
Issues with PPP Model:
Tariff regulation, lack of a dispute settlement process, and strict regulation on the scope of private players’ work are challenges in the PPP model.
Environmental Challenges:
Port activities like oil spills, ballast water discharge, and dredging harm marine ecosystems.
Social Impacts:
Port development often leads to the displacement of indigenous coastal populations.
Government Initiatives
Sagarmala Project:
Aims to promote port-led development by harnessing India’s vast coastline and navigable waterways.
Project UNNATI:
Benchmarking major ports with international standards to identify areas for improvement.
100% FDI in Port Construction:
Liberalization of FDI rules has attracted significant foreign investments.
Major Port Authorities Act 2021:
Decentralizes decision-making and enhances governance in major ports.
Marine Aids to Navigation Act 2021:
Improves safety and efficiency in vessel traffic services and training.
Indian Vessels Act 2021:
Ensures uniformity and standardization of provisions across all inland waterways.
Tax Holiday for Private Port Development:
Offers a 10-year tax holiday for enterprises involved in port development.
The Way Forward
Recommendations from the Ministry of Ports, Shipping & Waterways include:
- Formulating policies to generate employment opportunities.
- Linking private ports with major and minor ports.
- Promoting coordination among stakeholders.
- Implementing smart port technologies and solutions.
- Focusing on green port development.
Conclusion
To realize the Maritime India Vision 2030 and enhance India’s port infrastructure, initiatives such as developing world-class Mega Ports, transshipment hubs, and infrastructure modernization are crucial. These measures will promote economic growth, generate employment, and strengthen India’s position in the region.