INDIA REVIEW: CAPACITY EXPANSION
MATCHING PORT INVESTMENT WITH DIGITAL EFFICIENCY A National Port Grid and National Logistics Policy are two components in a push to improve port performance and infrastructure in India, reports Felicity Landon
8 Aerial view of container yard and cranes at Nhava Sheva terminal
India is looking to break into the ‘top ten’ league with the development of a mega container port at Vadhavan, in Maharashtra. With a price tag of US$9.2bn, the port was approved by the government in early February 2020. Assuming the project goes ahead – it still has to navigate past environmental objections – Vadhavan will provide India with one of the world’s top ten container ports, offering a natural draft of about 20 metres and the ability to handle vessels of up to 25,000 TEU in size. Meanwhile, Jawaharlal Nehru Port Trust (JNPT), currently at number 28 on the world’s top container ports list, is expected to move up to 17 when its fourth container terminal is completed in 2023. The port handled a record 5.1 million TEU last year – with the expansion, its capacity will be up to 10 million TEU per annum. These are just two examples of significant physical expansion. India’s shipping ministry is currently busy drawing up a ‘National Port Grid’ which will look to make the most of the synergy between major and minor ports, the idea being that all 204 minor ports in the country could become important centres of maritime trade, if revived. This project has involved identifying specific cargoes and downstream industries linked to each port and also focusing on coastal shipping and inland waterways. NEW NATIONAL LOGISTICS POLICY In parallel, the government’s new National Logistics Policy, due to be released soon, will be a digital drive for efficiency and cost-savings, with the focus on data analytics,
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e-commerce logistics, Port Community Systems and Single Window solutions. “The Indian government is accelerating its port development efforts as global transport giants continue to see the country as a promising freight spot,” says Rajni Patwardhan, head of marketing at Mumbai-based Kale Logistics Solutions. “That India’s ranking on the World Bank’s ease of doing business index improved from 100 in 2017 to 77 in 2018 has made news. What is not well known is that a vital role in this jump was played by the IT-enabled integration of India’s maritime infrastructure.” As more than 90% of India’s trade by volume is carried via the maritime route, there is a continuous need to develop India’s ports and trade-related infrastructure to accelerate growth in the manufacturing industry and to assist the ‘Made in India’ initiative, Ms Patwardhan points out. “There is immense potential for modernisation and growth of Indian ports. The Ministry of Shipping, the nodal agency for ports, encompasses the shipping and port sectors, including shipbuilding and ship repair, major ports and inland water transport. As per government policy, 100% FDI is allowed in port development projects.” The ministry’s Sagarmala programme, which is looking to reduce logistics costs for exports, imports and domestic trade, encompasses aspects such as optimising modal mix, lowering the logistics cost of bulk commodities by locating future industrial capacities near the coast, and improving export competitiveness by developing manufacturing clusters next to ports.
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