India has 12 major ports and about 200 non-major ports handling export and import cargo, which are spread over approximately 7500 kilometers of coastline. The 12 major ports of India handled approximately 57 percent of total cargo traffic in 2019-20. According to the Ministry of Shipping, around 95 percent of India's trading by volume and 70 percent by value is done through maritime transport. India’s ranking under the Trading Across Border (TAB) parameter of Ease of Doing business (EoDB) has recorded a jump from 80 to 68 in 2020, due to various measures such as direct port delivery (DPD), direct port entry (DPE), introduction of RFID, installation of scanners/container scanners, simplification of procedures, amongst others.India is also re-elected to the International Maritime Organization (IMO) Council under “Category B - States with the largest interest in international seaborne trade” for the biennium 2020-21.
Capacity and Traffic
India has seen an unprecedented growth of Indian seafarers employed on-board Indian and foreign flagged vessels, as a result of cumulative improvement in the quality of Maritime Training. The number of seafarers increased from 2.08 lakh in 2018 and to 2.3 lakh in 2019 as a result of initiatives taken by the Ministry of Shipping to increase the training capacity, increase the number of training berths, standardization of course curriculum and course material, improvement in examination system, simplified processes and e-governance modules.
The Ministry of Shipping, along with the State Governments is striving to increase the overall port capacity to 3300+ million metric tonnes per annum (MMTPA) by 2025 to cater to the growing traffic. Towards achieving this goal, more than 574 projects have been identified for implementation, during 2015-2035. These projects are spread across the areas of port modernization and new port development, port connectivity enhancement, port-linked industrialization and coastal community development. As of 30 September 2019, a total of 121 projects have been completed and 201 projects are under implementation.
Trends in Cargo traffic Handled at Major and Non-Major Ports in India
|Year||Major Ports||Non-Major Ports|
|Cargo (MT)||% Growth||Cargo (MT)||% Growth|
|Source: Ministry of Shipping, Exim Bank Research|
Cargo traffic at major ports in India stood at 704.8 MT in 2019-20, registering a CAGR of 4.04 percent between FY14- FY20 and y-o-y growth of 0.8 percent in 2019-20 as compared to previous year. The vessel traffic on the other hand saw negative y-o-y growth of (-) 6.5 percent in 2019-20. The container traffic reached 9,988 thousand twenty- foot equivalent units (TEUs) in 2019-20 as compared to 9,877 thousand TEU in the previous year.
The traffic at non-major ports has been increasing over the past 5 years (FY14-19) with a slight decline of less than (-)1 percent in 2015-16. The cargo traffic handled at non-major ports in India has outperformed traffic handled at major ports;recording a CAGR of almost 7 percent during FY14-19 and y-o-y growth of more than 10 percent in 2018-19 as compared to previous year.
To attract investment for the growth of this sector, the Government has allowed FDI of upto 100 percent in the shipping sector under automatic route for projects related to the construction and maintenance of ports and harbors. During April 2000- March 2020, ports attracted FDI of US$ 1.63 billion, accounting for 0.35 percent of the total FDI inflows into the country.
India’s increasing integration into global value chains requires a well-established port infrastructure. To supplement this, the Ministry of Shipping has proposed investments worth ₹ 6.01 lakh crore under Sagarmala Programme. A total of 92 port capacity expansion projects worth ₹ 58,884 cores have been identified for implementation over next 20 years and are expected to add 712 MTPA to the capacities at major ports. Under the Sagarmala Programme, the government has envisioned a total of 236 projects for modernization of ports involving an investment of ₹ 1.18 lakh crore by the year 2035.
As per the studies conducted under the Sagarmala Programme, cargo traffic at Indian ports is expected to be approximately 2500 MMTPA by 2025, while the current cargo handling capacity of Indian ports is only 1500 MMTPA. The 2 new major greenfield ports are proposed to be developed at Vadhavan (Maharashtra) and Paradip Outer Harbour (Odisha) to fill the demand gap and expand overall capacity of ports in India. Increasing investments and cargo traffic point towards a healthy outlook for the Indian ports sector.
India became a prime destination for green ship recycling with the passing and enactment of the landmark Recycling of Ships Act, 2019. India has also acceded to IMO’s Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships in November2019. The new Act provides a legislative framework for implementation of the provisions of the Hong Kong Convention. With the enactment of this Act, ship recycling volume is expected to double by 2024. Accession to IMO’s Hong Kong International Convention will give boost to the domestic ship recycling industry in India, making it one of the five major ship recycling countries in the world.
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The EU - The EU has put in place an extensive legislative framework for safety, environmental protection and quality shipping, which covers the entire chain. For more information, refer to Mobility and Transport