India has a coastline spanning 7516.6 kilometers, forming one of the biggest peninsulas in the world.
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. It is serviced by 13 major ports, 200 notified minor and intermediate ports. The total 200 non-major ports are in the following States:-
Maharashtra (48); Gujarat (42); Tamil Nadu (15); Karnataka (10); Kerala (17); Andhra Pradesh (12); Odisha (13); Goa (5); West Bengal (1); Daman and Diu (2); Lakshadweep (10); Pondicherry (2); and Andaman & Nicobar (23).
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Present situation of Indian Ports
- The development of port infrastructure in India is not on par with other ports across the world. China’s 10th largest port is 50% bigger than India’s largest, all of India’s 12 ports that are officially classified as “major” carry less traffic between them than the single port-city of Singapore.
- Colombo can handle more container traffic than all of India’s ports put together — With something like three-quarters of that being transshipment of containers from India, because India’s ports are too shallow to accommodate big container vessels. For a country with a long maritime tradition, this is a pathetic state of affairs.
- Indian ships account for a tiny part of the country’s trade: About 15%, compared to the international norm of 40%. It has no civilian shipyards to compare with the world’s best. The two or three private ones that look to build commercial vessels are deep in debt and short of orders; most Indian ship-owners prefer to look to foreign yards, because of better quality and assurance on delivery schedules. In short, India’s maritime business needs a booster shot.
What’s the reason for such situation?
- The cost-inefficiency and non-competitiveness of the cargo has resulted in higher through-port and transport costs.
- Shipping lines avoid touching ports in India because of the long waiting time. The capacity of various ports including Mumbai has already been exhausted and now capacities of other ports like JNPT are on the verge of exhaustion.
- The turnaround time at ports in India is one of the biggest handicaps logistics service providers have to deal with. The major reason for the poor turnaround time at Indian ports is that they are not comparable to global standards.
- There are 12 types of different taxes that Ships have to pay at our Ports
- Three-quarters of Traffic Which Colombo port handles consists of transshipment of containers from India, because India’s ports are too shallow to accommodate big container vessels. This is the reason why Colombo Port handles more ships than all of India’s ports put together.
- Governance issues: Major ports managed by Central govt. while minor ports by state govt. So skewed distribution of traffic, , lack of coordination in port traffic management and non-uniform tariff,resulting in suboptimal utilization of port infra.
- Political pressure, lack of autonomy, absence of incentives, excessive bureaucracy, and hierarchical rigidities are contributors to the current state of the Indian ports
- Inadequate dredging and container handling facilities
- Many major ports are affected by silting and require frequent dredging
- Except for Bombay and Madras, other ports do not have the facility of night navigation and pilots. This hampers working round the clock
Steps taken by Government to improve the situation
- The government has launched Sagarmala and its prime objective is to “promote port-led direct and indirect development and to provide infrastructure to transport goods to and from ports quickly, efficiently and cost-effectively.”
- Under this plan, a comprehensive and integrated planning for Sagarmala for the entire coastline shall be prepared within six months which will identify potential geographical regions to be called Coastal Economic Zones (CEZs).
- Government has proposed Central Ports Act 2016 to replace major port trusts act 1963 to give more power and autonomy to the major sea ports. Under the proposed act the Major ports will be able to lease land for port-related use for up to 40 years, and for non-port related activities up to 20 years
- Government has given SEZ status to JNPT port
- Passing of National Water ways Act 2015 and Coastal shipping agreement with Bangladesh which will give boost to coastal and inland waterways.
- Port led industrialization and modernization of adjacent situated areas has been envisaged as mechanism for enhancing indigenous manufacturing potential and creating employment opportunities
- Government has allowed 100% FDI for port development projects
- 100% income tax exemption from income tax is extended to companies investing in port infrastructure. Further, a 10-year tax holiday has been given to enterprises engaged in the business of developing, maintaining and operating ports, inland waterways and inland ports.
- Government has proposed to work towards converting 12 public port trusts in India into corporations under the Companies Act to bring greater efficiencies in operations, raise funds for growth and compete better with their private sector counterparts.
- The Centre recently gave its ‘in-principle’ approval to set up the country’s13th major port at Enayam in Tamil Nadu
What more should be done?
As India eyes resurgence in port-led activities in the country the above mentioned problems faced by Indian ports, indicate the need for the Central government to undertake measures to facilitate trade through Indian ports, either in terms of building and maintaining infrastructure for handling desired capacities or undertaking relevant policy and regulatory reforms. These Reforms should include
- In terms of infrastructure, it is important to maintain draft to serve bigger vessels, ensure mechanisation of ports through introduction of new equipment and procedures, build new facilities, upgrade existing facilities and automate systems/procedures.
- In terms of policy and regulatory reforms, it is important to streamline tariff determination by TAMP along with a provision for periodic revisions, ensure transparent and effective contractual arrangements in PPPs, implement strengthened communication platforms for seamless information flow among stakeholders, strengthen system integration, ensure paperless clearance of procedures and transactions, develop user information portals
- We also need corporatization of our major ports.
- More major Sea ports should be built
There is also need to improve the road connectivity between the ports and Hinterland.
