INDIA’S MARITIME SECTOR: DRIVING GLOBAL COMPETITIVENESS
India’s port development programs have gained significant momentum lately, with nine of our ports securing positions in the Global Top 100 of the Container Port Performance Index (CPPI) 2023, as reported by the World Bank and S&P Global Market Intelligence. This notable achievement underscores the Ministry of Ports, Shipping and Waterways’ (MoPSW) commitment to modernizing infrastructure and enhancing operational efficiency at Indian ports through various strategic measures. Union Minister of Ports, Shipping & Waterways, Shri Sarbananda Sonowal, attributes this success to the visionary leadership of Prime Minister Shri Narendra Modi, emphasizing how the government's efforts have been crucial in "building resilience, incorporating new technology, and green infrastructure to ensure the stability of global markets and sustainability of India’s maritime industry".
The Government of India is strategically boosting manufacturing sector's contribution to the country’s GDP through initiatives such as Make in India and targeted production-linked incentives in strategic sectors. As these efforts gain traction, the demand for global exports is expected to rise, prompting the government to set an ambitious export target of USD 2 trillion by 2030. To support this growth, a robust infrastructure is essential, with maritime transport playing a crucial role as it handles approximately 95% of India's trade by volume and 68% by value, making it a key pillar in sustaining the expanding export market.
Our port infrastructure consists of 12 major ports, which operate under the administrative control of MoPSW. These major ports are responsible for managing a substantial 55% of the nation’s cargo traffic, while over 200 non-major ports account for the remaining 45%. To enhance their capacity and efficiency, both major and non-major ports are undertaking significant expansion and infrastructure advancement. One of the most noteworthy projects is the Vadhavan Port in Maharashtra, for which the Hon’ble Prime Minister laid the foundation stone in August 2024. This port is set to become India’s 13th major port, with an investment of approximately Rs 76,220 crores. Once completed, Vadhavan Port aims to rank among the top 10 container ports globally.
India’s ports are also demonstrating impressive performance in key operational metrics within the maritime sector. The average container dwell time stands at just 3 days, a figure that is notably lower than that of many developed nations, including the USA (7 days) and Germany (10 days). This achievement highlights the efficiency of cargo handling and a reduction in congestion at Indian ports. Furthermore, India’s turnaround time for ships is a competitive 0.9 days, outperforming global players like the USA (1.5 days) and Singapore (1.0 day). These efficiencies are essential for minimizing vessel waiting times and maximizing port productivity, ultimately driving the growth of India's trade and economy.
As part of the strategic push to enhance the efficiency and global standing of Indian ports, the Government of India has introduced several key policy initiatives over the past few years. Central to this effort is the Sagarmala Programme, a flagship project under the MoPSW, designed to drive port-led development through modernization, improved connectivity, and coastal industrialization. The establishment of 14 Coastal Economic Zones (CEZs) is a critical component of this effort, seamlessly integrating ports with industrial units and logistics infrastructure to spur regional progress and reduce logistics costs. Complementing this, the Sagar Aankalan Guidelines, launched in 2024, provides a comprehensive framework for benchmarking logistics performance through inter-port comparisons. This initiative fosters a culture of continuous improvement, ensuring Indian ports remain competitive on a global scale.
Investment-led growth, driven by asset recycling and capital, forms the core of the government’s economic agenda with plans to leverage the private sector. To support this strategy, National Infrastructure Pipeline was launched in 2019, aiming to facilitate infrastructure investments of approximately Rs 111 lakh crores from 2020 to 2025. Building on this foundation, National Monetization Pipeline was introduced in 2021 to unlock value in dormant public assets by attracting institutional capital for further public investments. In this regard, the MoPSW has also outlined a plan to award 44 projects worth over Rs 22,790 crore under a public-private partnership (PPP) model for FY2024 and 2025.
As the world turns its attention to sustainable infrastructure, India’s ports and shipping sector is making significant strides towards adopting eco-friendly practices. MoPSW has rolled out several measures to advance the growth of sustainable port infrastructure and greener vessels. The Harit Sagar Green Port Guidelines provides guidance to major ports in creating a comprehensive action plan to reduce their carbon footprint, implement carbon-neutral technologies, and waste minimization through the 5R concept (Refuse, Reduce, Reuse, Repurpose, and Recycle).
To bolster the progress of green vessels, MoPSW offers 30% fiscal assistance for vessels powered by green fuels under the Ship Building Financial Assistance Policy, compared to 20% for those using conventional, carbon-intensive fuels. Additionally, the Green Tug Transition Program aims to position India as a global leader in green shipbuilding by 2030, with the goal of transitioning all tug operations at major ports to green tugs by 2040. Supporting these efforts, the Government of India inaugurated the National Centre of Excellence in Green Port and Shipping in March 2023, which will focus on producing Green Hybrid tugs and exploring non-fossil fuel solutions such as methanol, ammonia, and hydrogen to further sustainable development.
As evident from above, India's maritime sector is on the cusp of significant transformation as it addresses key challenges and implements strategic actions to foster growth. One of the major hurdles has been the lack of long-term funding at low interest rates, which is essential for sustainable advancement. To address this issue, MoPSW is actively working on establishing a dedicated Maritime Development Fund. This fund is designed to meet the unique funding requirements of the maritime sector, facilitating crucial endeavours such as shipbuilding, decarbonization, green energy adoption, technology innovation, and manpower training and improvement.
Another significant growth driver is India's commitment to renewable energy integration within its ports. With a target of 50 percent cumulative electric power installed capacity from renewable sources by 2030, MoPSW is focusing on accelerating the adoption of solar and wind energy projects at major ports. This includes utilizing rooftops and shallow water surfaces for solar installations and implementing offshore wind energy projects. Additionally, the recent approval of a Viability Gap Funding scheme in June 2024 for offshore wind energy projects in Gujarat and Tamil Nadu, with a substantial outlay of Rs 7,453 crores, reflects the government's dedication to enhancing renewable energy capacity of ports.
Expansion of infrastructure for the storage, bunkering, and refuelling of green fuels at Indian ports is poised to be a significant growth driver in the coming years. With India's strategic location along key international shipping routes and the establishment of bunkering facilities for green fuels will attract eco-conscious shipping lines and solidify India’s position in the global green energy movement. Moreover, development of warehousing facilities at major ports represents another crucial growth opportunity. By improving cargo management and providing value-added services at the ports, these warehouses will play a crucial role in improving trade efficiency and reducing logistics costs.
The Government of India, through a myriad of initiatives, makes it evident that infrastructure—particularly ports and shipping—is integral to the nation's future vision. To maintain this momentum within the sector, India must concentrate on niche areas such as green fuel bunkering, shipbuilding, digitization, and others. Achieving these ambitious goals necessitates a multifaceted approach driven by strategic investment, sustainable practices and technological advancements. By advancing these endeavours, India is well-positioned to emerge as a global leader in the maritime industry, aligning with the forward-looking goals of the government as outlined in the Maritime India Vision 2030 and the Amrit Kaal Vision 2047.
Ankita Singh
Investment Specialist, Invest India
Nandini Gupta
