PORTS & SHIPPING - INVEST INDIA

Naturally gifted with over 7,500 kms long coastline and geographically favorable location, India has a strategic presence right between world's most important key routes of international oil trade in the Indian Ocean. Consequentially around 95% of India's trading by volume and 70% by value is done through maritime transport.

India's current mammoth maritime infrastructure consists of ports, shipyards, and inland waterways.

• The country has 212 ports - 12 major ports (under central government) and 200 minor ports (under state government) - which handled a total of 1,320 million tonnes of cargo in 2019-20
• 73.6 MT of cargo was registered in FY 2019-20 through inland waterways
• 28 shipyards (8 public sector) operate in India. In FY19, 706 ships were repaired in the country and 188 vessels were built in India with a gross tonnage of 171,750 tonnes.
• Ranked 2nd worldwide in terms of gross tonnage of ships recycled, India recycled 3.25 million gross tonnes of ships in 2019, a share of 26.6% globally.

The Sagarmala initiative, a flagship programme of Ministry of Ports, Shipping and waterways was launched in 2016 to promote port-led development in the country through harnessing India's long coastline. The main vision of the Sagarmala Programme is to reduce logistics cost for EXIM and domestic trade with minimal infrastructure investment. The programme focuses on port modernization, new port development, port connectivity enhancement, port-linked industrialization, and coastal community development.

Maritime India Vision 2030: Launched at the Maritime India Summit 2021, the vision aims to improve India's various subsectors within the umbrella of maritime infrastructure. Through a compendium of 400 new investible projects worth USD 31 billion that covers areas of ports development, ship building, inland waterways, and tourism, the Vision targets to bring the Indian Maritime Industry at par with top global benchmarks by 2030.

In the Union Budget 2021, the FM announced seven projects worth USD 270 million for the privatization at ports in India. This shall help bring FDI in the country and increase the competitive landscape of India's maritime infrastructure globally.

Central government has already taken multiple initiatives like Major Port Authorities Act 2021 which enables major ports to move from a service model to a landlord model and bring in more private sector participation to drive operational efficiency. This will enable major ports to transform effectively for the future.

In addition, the Financial Assistance Policy provides subsidies of up to 20% ship builders in India from 2016-2026 to build Indian flagged vessels. The move is aimed at promoting shipbuilding in Indian shipyards and give a boost to Hon'ble Prime Minister's 'Make In India' vision.

The National Monetisation Pipeline launched in 2021 has also laid down a pipeline of public assets inviting private institutional investment. With 12 major ports, the aggregate asset capacity under the purview of Central line ministry (MoPSW,) directly held by the Port Trusts is around 1,494 MMTPA, as on March 31, 2020.

Assets worth USD 1.7 billion considered for monetisation from FY 2022 to 2025 are spread across 9 of the 12 major ports. Towards this, 31 projects have been identified for private sector participation for improved operational efficiency and capacity utilisation of existing port assets. Key projects include additional berths mechanisation, development of oil jetties, container jetties, O&M of container terminal and O&M of International cruise terminals.

Support and positive changes being brought by the government have not only encouraged foreign participation of investors, but also assisted in uplifting India's image as an attractive investment destination globally. Hence, coupled with strong reforms and investors' growing interests, the maritime industry in India is likely to witness a high growth in its near future.

Himani Goel

Principal Investment Specialist

Invest India

Ayush Saxena

Investment Specialist

Invest India

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