Introduction

The proposal for a mega port at Galathea Bay in Great Nicobar is being presented as a milestone in India’s maritime rise, intended to transform the country into a regional logistics hub comparable to Colombo or Singapore. Yet, experts argue that this vision rests on flawed economic assumptions, geographical isolation, and logistical weaknesses. The project’s viability is in question, as it lacks the organic trade ecosystem necessary for sustainable growth.

Why in the News?

The Great Nicobar port project has been in focus due to its scale, ₹75,000 crore investment aimed at creating a massive transshipment hub with long-term geopolitical and economic significance. It’s projected as India’s entry into the global maritime league. However, this marks a sharp contrast with earlier models of port development that grew around organic trade clusters and industrial hinterlands, not in remote ecological zones. The controversy centers on economic overestimation and environmental underestimation, making it one of the most debated infrastructure projects in recent years.

Is the economic rationale of the port sound?

1. Flawed Assumptions: The project assumes India can capture transshipment traffic from Colombo and Singapore, but transshipment thrives on connectivity, carrier loyalty, and trade density, none of which currently exist at Nicobar.
2. Absence of Hinterland: Unlike Colombo, which is connected to industrial networks, Nicobar lacks any comparable economic base, making port sustenance difficult.
3. Dependence on Subsidies: Without a strong domestic trade ecosystem, the port would require massive subsidies to remain operational, contradicting long-term economic logic.

Why geography makes the project inherently difficult?

1. Remoteness: Great Nicobar is 1,200 km from mainland India, severely limiting cost-effective logistics.
2. Lack of Connectivity: Poor access to support industries, dry ports, and container parks increases shipping costs and delays.
3. Comparative Disadvantage: Other regional ports (Colombo, Singapore, Klang) already have integrated logistics and deep-water infrastructure, leaving Nicobar at a permanent disadvantage.

Does strategic utility justify economic risk?

1. Strategic Overreach: Supporters link the project to India’s naval presence and eastern maritime security, yet this rationale is weak for a commercial port.
2. No Clear Defence Objective: India’s navy already operates from INS Baaz, and duplicating facilities under civilian guise increases financial and administrative strain.
3. Limited Security Value: The port adds little to India’s surveillance or deterrence posture compared to existing assets in the Andaman and Nicobar Command.

How logistics and trade realities contradict projections

1. Trade Patterns: Global shipping lines are deeply entrenched in established networks like Colombo and Singapore, where carrier commitments drive decisions.
2. Operational Constraints: Indian ports, even major ones, struggle with high port-calling and handling costs, illustrated by Krishnapatnam Port (Andhra Pradesh), which still depends on government facilitation.
3. Organic Hubs vs. Engineered Hubs: Great Nicobar, unlike Vizhinjam (Kerala) or Vadhavan (Maharashtra), lacks a supportive industrial corridor to sustain container flow.

Is there a precedent for success or failure?

1. Colombo’s Model: Success based on decades of carrier relationships, industrial integration, and trust-based trade routes.
2. Indian Experience: Vizhinjam shows progress but is still dominated by a single operator (MSC), revealing dependency rather than competitiveness.
3. Lesson Learned: Without reciprocal liner relationships or industrial hinterland, a port remains a mirage of connectivity.

Conclusion

The Great Nicobar port embodies ambition divorced from ground realities. With limited economic viability, high environmental cost, and questionable strategic logic, it represents a misplaced vision of growth. Port-led development must emerge from organic trade evolution, not state-engineered projects in ecologically fragile zones. The focus should shift toward strengthening existing ports, coastal shipping, and integrated logistics, ensuring India’s maritime rise is both sustainable and strategic.

PYQ Relevance

[UPSC 2021] Investment in infrastructure is essential for more rapid and inclusive economic growth. Discuss in the light of India’s experience.

Linkage: It directly aligns with The Mirage of Port-Led Development in Great Nicobar article. Both examine how infrastructure-led growth can be unsustainable without economic and logistical foundations. The Nicobar port exemplifies the limits of infrastructure expansion without inclusive or organic economic linkages.

Get an IAS/IPS ranker as your 1: 1 personal mentor for UPSC 2024

Attend Now