Why in the News?
Prime Minister Narendra Modi said on Friday that coastal states and port cities will play a major role in India’s growth as it becomes more developed. He was speaking after the launch of the ₹8,800 crore Vizhinjam International Deepwater Multipurpose Seaport in Kerala’s capital.
What is the significance of the Vizhinjam International Deepwater Multipurpose Seaport for India’s maritime trade?
- Strategic Global Location: Located close to the international East-West shipping route, making it ideal for global container traffic. Eg: Ships passing through the Suez Canal–Malacca route can now directly dock at Vizhinjam without diversion, saving cost and time.
- India’s First Dedicated Transshipment Port: Will handle transshipment of containers that earlier went to foreign ports like Colombo (Sri Lanka), Dubai, or Singapore. Eg: Around 75% of India’s transshipped cargo is currently handled abroad; Vizhinjam aims to reverse this trend and retain revenue domestically.
- Natural Deep Draft for Large Vessels: With a natural draft of nearly 20 metres, it can host Ultra Large Container Vessels (ULCVs) without the need for expensive dredging. Eg: Ports like Colombo or Rotterdam require regular dredging, while Vizhinjam offers cost-effective long-term operations.
- Boost to Logistics and Trade Efficiency: Reduces logistics costs, cargo handling time, and dependence on intermediate ports, increasing India’s ease of doing business. Eg: Indian exporters from hinterland states can now ship directly via Vizhinjam, avoiding time-consuming rerouting through foreign ports.
- Economic Multiplier Effect and Self-Reliance: Encourages Make in India, builds maritime self-reliance, and fuels coastal economy development. Eg: Encourages investments in warehousing, ship repair, and allied services around the port zone—generating local employment and GDP growth.
Why is private sector participation considered crucial in developing port infrastructure in India?
- Mobilization of Capital and Faster Project Execution: The private sector brings in large-scale investments that the government alone may not be able to allocate promptly. Eg: The ₹8,800 crore Vizhinjam Port was developed through a public-private partnership (PPP) with Adani Ports, accelerating infrastructure delivery.
- Technological Innovation and Operational Efficiency: Private companies often introduce modern technologies and international best practices, improving service quality and turnaround time. Eg: Mundra Port, operated by Adani Ports, has emerged as one of India’s most efficient ports due to automation and smart logistics.
- Risk Sharing and Long-Term Sustainability: PPP models allow for shared risks between the public and private sectors, reducing the financial burden on the government and ensuring long-term commitment. Eg: The collaboration between Kerala’s state government and Adani Group in Vizhinjam port demonstrates how risk-sharing enables execution even in ideologically diverse environments.
Where is the new shipbuilding and repair cluster being set up?
- Strategic Location in Kochi, Kerala: Kochi has been selected for its existing maritime infrastructure and strategic coastal position. The cluster aims to enhance India’s shipbuilding and repair capabilities, reducing reliance on foreign facilities. Eg: The cluster is being developed through a collaboration between Cochin Shipyard Limited and Drydocks World, aiming to create world-class ship repair facilities in Kochi.
- Public-Private Partnerships Driving Development: The project leverages public-private partnerships to combine government support with private sector efficiency and investment. This approach is expected to bring in advanced technologies and best practices. Eg: Cochin Shipyard Limited, a government-owned entity, has signed an MoU with Drydocks World to jointly develop the ship repair cluster in Kochi.
- Economic Growth and Employment Opportunities: The cluster is anticipated to generate substantial employment, particularly benefiting the local population in Kerala. It will also contribute to the growth of ancillary industries and services. Eg: The establishment of the shipbuilding and repair cluster in Kochi is expected to create numerous new employment opportunities, providing Kerala’s local talent and youth with a platform for growth.
What opportunities is it expected to create?
- Job Creation and Skill Development: The new shipbuilding and repair cluster in Kochi is expected to create thousands of direct and indirect jobs, particularly benefiting the local population by providing employment opportunities in shipbuilding, repair, and ancillary services.
- Boost to India’s Maritime and Manufacturing Sectors: The cluster will significantly enhance India’s shipbuilding capabilities, reducing dependence on foreign facilities and positioning India as a key player in global shipbuilding and repair.
Way forward:
- Strengthen Port Connectivity and Infrastructure: Enhance hinterland connectivity to ensure seamless movement of goods between ports and key industrial zones. Eg: Develop efficient road, rail, and inland waterways to complement the Vizhinjam Port and Kochi shipbuilding cluster.
- Focus on Skill Development and Innovation: Invest in specialized maritime education and training programs to create a skilled workforce. Eg: Collaborate with global institutions to bring advanced shipbuilding technologies and best practices to India, fostering innovation and sustainability in the maritime sector.
Mains PYQ:
[UPSC 2021] “Investment in infrastructure is essential for more rapid and inclusive economic growth.”Discuss in the light of India’s experience.
Linkage: Coastal states and port cities will be key growth centres and that strengthening the maritime sector through infrastructure is essential for driving economic power and achieving the full potential of the port economy. Thus, this question aligns with the core idea that ports, as critical infrastructure, are drivers of growth.
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