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(AGUIJMSR) 2017, Vol. No. 4, Jul-Dec e-ISSN: 2455- 1562; p-ISSN: 2455-6092

MARITIME AGENDA 2020 – THE ROAD MAP FOR

INDIA’S PORT SECTOR
Dr. M. Bina Celine Dorathy,

Associate Professor, AMET University, 135, East Coast Road, Kanathur-603112, Chennai, India

ABSTRACT

Despite systematic planning and advancements, Indian ports still suffer from serious inadequacies. The
average turnaround time, dwell time etc in case of Indian ports is much higher compared to other
maritime nations. Similar is the case with other port performance indicators like Crane Productivity,
Container Evacuation Rate etc. Indian container cargo is transshipped in Colombo, Dubai or Singapore
resulting in additional costs and transit times. All this undermines the competitiveness of Indian ports.
There is, therefore, an urgent need to restructure the port sector in order to improve efficiency and
reduce costs. At this juncture this article discusses the major drawbacks of the port segment in India with
particular reference to major ports. It lists the objectives of the Maritime Agenda 2020 for the
development of the port sector and discusses the initiatives taken by the government to fulfill the
objectives. The paper makes an attempt to highlight the achievements of this sector in the context of
Maritime Agenda 2020.

Key words: Maritime Agenda 2020, Port sector, Government initiatives

INTRODUCTION
India‟s has a coastline of 7,517 kms with potentially navigable waterways of 14,500 kms. It has
12 major ports & around 200 minor & intermediate ports. Maharashtra with 48 docks has the
maximum number of non-major ports followed by Gujarat with 42 docks & Andaman & Nicobar
Islands with 23 docks [1].

India has a federal structure where maritime transport is administered by both the Central and
State Governments. All the major ports are governed by the Central government‟s Ministry of
Shipping while the Minor & Intermediate ports are under the relevant departments in the coastal
states. Of the different segments coming under the Maritime sector, the port segment is crucial
since it is directly linked to the foreign trade prospects of the country. Therefore over the years, a
host of policy and regulatory reforms have been introduced by the Government to strengthen this
segment. But still the major ports in India are plagued by serious drawbacks. The infrastructure
facilities in Indian ports are also abysmally low. They do not have adequate facilities to receive
big vessels. Lack of modern dredging facilities further adds to the problem. There is a good
chance of Indian ports becoming feeder ports in future if this issue is not attended with
seriousness.
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MAJOR DRAWBACKS OF INDIAN PORT SECTOR

Over the years, a host of policy and regulatory reforms have been introduced by the Government
to strengthen this segment. But still this sector is hampered by [2]

• High logistic cost - around 14 percent of GDP in comparison to 6 to 7 percent of

GDP in developed countries like China.

• Poor port infrastructure and productivity – transshipment of cargo is handled at

south Asian hubs like Colombo and Singapore, hurting competiveness of
country‟s export.

• Lack of modern equipment, mechanization and efficient cargo handling process

and absence of last mile connectivity to port by railways

• Heavy silting and Dredging-caused by rivers

There is no longer quay to facilitate larger vessels to dock. The best example for this is, in 2014
CSCL Globa, the then world‟s largest container carrying vessel was unable to dock in any of the
Indian ports [3]. Most of the Indian ports have low draft ranging from 7-14 meters, which is
much lesser than the 16-18 meters of global major ports [4]. This is limiting the size of the ship
calling the port. However, private ports like Gangavaram, Krishnapatnam and Mundra are filling
the void by having deeper drafts. These ports have a draft in excess of 18 meters, which is at par
with some global major ports like Singapore (22 meters), Hong Kong (15.5 meters) and Kelang
(13.4 meters). Similarly on the west coast, Mundra has the capability to handle the container
vessels with maximum draft requirement of 15.1 meters [5 ]. The average turnaround time, dwell
time etc in case of Indian ports is also much higher. Viz TRT in case of India is 3.44 [6] days
compared to less than 12 hours in Singapore. Due to this, few large liner ships are willing to call
on Indian ports as they cannot afford to accept the long waiting time. At a time when shipping
companies are opting for larger vessels to save costs this could be a doom for India

Other major issues affecting the port segment are capacity constraints, poor cargo handling, poor
equipment utilisation, low labour productivity, lower IT penetration and so on. The Level of
mechanization in Indian ports is quiet low compared to international standards. Globally,
terminal operators are getting larger ships in and out more quickly by employing more cranes
over more shifts. For 8,000-TEU terminals deploy six cranes per vessel and for 14,000 TEUs, it
is seven or eight. In India, it is reported that most major ports have only 2 cranes per vessel,
whereas, non – major ports such as Krishnapatnam, Mundra and Pipavav have 5 cranes per
vessel[7]. Also the average gross crane rate is only 18-20 moves/hour/crane for major ports [8].
This increases the turnaround time for Indian major ports quite significantly

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The major factors that have led to inefficiency of this sector are:

 Most major ports were originally designed to handle specific categories of cargo, which
have declined in time while other types of cargoes gained importance. The ports have not
been able to adjust to the categories of cargo which grew the most. There are, thus,
several berths for traditional cargo, which are underutilised, and only a few for new
cargo, which are over-utilised.

 Over staffing at Indian ports remains rampant and productivity indicators in respect of
cargo and equipment handling continue to be poor.

 Documentary procedures relating to cargo handling such as customs clearance

requirements are unduly complicated and time consuming.

 Port access facilities and arrangements for moving inbound and outbound cargo are
inadequate and unsatisfactory.

 Average draughts available at major ports are much below the international standards and
therefore they are not able to handle bigger size vessels.

 Inter-port and intra-port competition, which has been conducive to substantial

productivity increases in other countries is absent in India due to poor inland connectivity
and a policy regime that has protected domestic ports against competitive pressures.

MARITIME AGENDA 2020 – PORT SEGMENT [9]

The facilities available at ports and their efficiency go a long way in determining the cost of
operation of a port which is passed on to the port users in the form of port charges. Therefore in
an effort to modernize the port sector the Maritime Agenda 2020 has set forth the following
objectives exclusively for the port segment.

1. Create Port capacity of 3200 M.T. for handling about 2500 M.T. of cargo.

2. Improve Port performance on par with the best in the world.

3. Implementation of the Port development projects.

4. Full mechanisation of cargo handling and movement.

5. Major Ports to have draft of not less than 14 metres and hub ports 17 metres.

6. A new policy on dredging.

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7. Identification and implementation of projects for rail, road and inland waterway
connectivity to ports.

8. Development of two hub ports on each of the West and the East coasts – Mumbai
(JNPT), Kochi, Chennai and Visakhapatnam.

9. Corporatisation of Major Ports

10. New Land Policy for Major Ports

11. New Policy on captive berths

12. Establishing a Port Regulator for all ports for setting, monitoring and regulating service
levels and technical & performance standards

13. Shifting of transhipment of Indian containers from foreign ports to Indian ports

14. Policy on co-operation and competition amongst Indian Ports

15. Establishing „Indian Ports Global‟ for overseas investments by Indian Ports

To fall in line with the above objectives, the government has initiated several measures which are
discussed below [10]

INVESTMENT POLICY
 100 per cent FDI has been allowed under the automatic route for port and harbour
construction and maintenance projects.

 Award of Waterfront and Associated Land policy was approved in 2016. Under the
policy, Port Dependent Industries (PDI) will be granted concessions for setting up
dedicated facilities in Major Ports for import/export, storage of cargo before
transportation to their destination, for a maximum period of 30 years. Provisions have
been made for the allocation of waterfront and land to Port based industries including
Central/State PSUs on a captive basis.

 The Cabinet has approved The Major Ports Bill in 2016 which advocates for greater
autonomy to port boards.

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FISCAL INCENTIVES
 Incentives such as Income tax exemption for infrastructure development including ports,
and a 10-year tax holiday to enterprises engaged in the business of developing,
maintaining and operating ports, inland waterways and inland ports have been available.

 Budget 2016-17 provided the following tax incentives for the maritime sector

Financial assistance upto 50% of the cost of the Project subject to a maximum of INR 25 crore
to Major / Non-Major Ports for construction/ upgradation of exclusive coastal berths for coastal
cargo, berths/jetties for passenger ferries and construction of platforms/ jetties for hovercrafts/
seaplanes in port waters

 Customs and Central Excise Duties exempted on

Bunker fuels used in Indian flag vessels carrying a mix of EXIM, empty and domestic containers
between two or more ports in India and Inputs utilized for the purpose of manufacture of ships

 Sagarmala Project

The Sagarmala project envisages a port-led economy through infrastructure development in ports
and integration of ports with Special Economic Zones, Port based Smart Cities, Industrial Parks,
Warehouses, Logistics Parks and Transport Corridors. The key objective of the project is to
develop port infrastructure in India that results in quick, efficient and cost-effective transport to
and from ports. It also includes establishment of rail / road linkages with the port terminals, thus
providing last mile connectivity to ports; development of linkages with new regions, enhanced
multi-modal connectivity including rail, inland water, coastal and road services. A total of 173
projects have been identified under the National Perspective Plan (NPP) for the Sagarmala
Programme. Twenty-six port-rail connectivity projects have been identified as part of the NPP.
These projects are expected to be completed by 2019- 20.

Table 1

Projects Identified under NPP for Sagarmala Programme

S.No Project Archetype Number

of Projects

1 Port Modernisation 53

2 Port Connectivity 83

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3 Port Led Industrialization 29

4 Coastal Community 8
development

Total 173

Source: www.makeinindia.com/article/-/v/ports-shipping-sector-achievement-report

Some of the other infrastructure enablement projects include:

 Transloading facility at Kolkata Port Trust with an investment of INR 252 crore.

 Modernization of Sasson Dock Fishing Harbor, Mumbai is underway

 For deepening of draft to 18 metres to handle large vessels Major Ports are taking up
Techno Economic Feasibility studies. Project at Mormugao Port has been initiated on
PPP basis.

 Under the “Port Master Plan”, a total of 142 Port Modernization and 30 Port Connectivity
projects to handle the cargo efficiently across 12 major ports have been identified. These
identified projects will be developed phase-wise till 2035.

 A Port based Special Economic Zone, with an investment of INR 4000 crore is to come
up at Jawaharlal Nehru Port Trust (JNPT) Port. The project which started in August, 2014
and expected to be completed in 3 years will create additional .15 million direct and
indirect jobs

 The new Berthing Policy that came into effect on August 20, 2016 aims to reduce
berthing time and overall turn-around time of ships, standardize anchorage charges etc.
across major ports.

 Major ports to facilitate movement of dry bulk/general cargo coastal vessels with priority
berthing facilities.

EASE OF DOING BUSINESS INITIATIVES

 Green channel for coastal cargo has been established at major ports of Kolkata,
Visakhapatnam, V.O.Chidambaranar, Cochin, New Mangalore, Mumbai and Kandla.

 Ship Repair Units (SRUs) are no longer required to register with Directorate General
Shipping. The concessions and facilities are to be extended to SRUs without registration.

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 Major ports can now sanction and incur expenditure on capital works upto INR 200 crore
up from the previous limit of INR 50 crore.

 Major Ports will reduce charges for cargo/vessels related services and will provide
special discount during non-peak hours.

 Manual Forms 11 and 13 replaced with eform 13 at all three terminals at JNPT Port and
other Major Ports. This enables customs authorization to be obtained online while
accepting containers.

 JNPT has extended Direct Port Delivery facility to all its Accredited Client Programme
(ACP) clients. The earlier conditions for providing DPD have been waived off.

 Direct Port Delivery (DPD) containers have been automated and container scanners have
been installed to reduce time taken for operations and track the movement of containers
at JNPT Port.

 The Centralized Web-based Port Community System (PCS) has been strengthened as a
single window system to facilitate seamless exchange of data and messages between all
the stakeholders of the port community. Custom IGM EDI message has been integrated
with Terminal Operating System, along with bill of entry and out of charge messages.

 Logistic Data Bank Tagging for real-time tracking of container movement using RFID
technology, has been operationalized at 4 terminals at the JNPT port.

ACHIEVEMENTS
The above initiatives have resulted in the following accomplishments [11]

 An additional capacity of 94 million tones have been added to Major Ports in FY 2015-
16, which has been the highest ever capacity addition.

 56 New Projects worth INR 25000 crores have been awarded during the last two years,
which will create an additional port capacity of 317 million tonnes per annum.

 The cargo handled by major ports went up by 6.27% in FY 2016-17 (Apr-Oct) to 370.04
million tonnes (MT) compared to 348.21 MT during the same period previous year.

 Turn around time at ports reduced by 25% from 2.55 days in FY 2012-2013 to 2.04 days
in FY 2015-2016

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Fig 1

Source: www.joc.com/port.../port.../data-shows-container-dwell-times-improve-major-indian-

 Three times reduction in Pre-Berthing time from 12.1 hours in FY 2012-13 to 3.8 hours
in FY 2015-16.

 With a favourable FDI policy there has been 9 times increase in FDI in Ports & Sea
transport sector in two years from USD 85 Million (2012-14) to USD 764 million (2014-
16). USD587 million received as FDI equity during Apr-Dec 2016.

CONCLUSION
The Indian maritime industry is an integral part of the country‟s trade and commerce. With its
long coastline and potentially navigable waterways India, has enormous potential to become a
maritime hub in the region. Realising this, over the years, several policy reforms have been
initiated by the Government. The achievements listed above clearly indicate that the initiatives
have started paying off. But despite these achievements it must be noted that India port sector is
still not on par with international standards. Technology wise India has a long way to go when
compared to Singapore or Dubai. The fact that a country like India, with its glorious past in
maritime trade and a sufficiently long coastline, is still not able to emerge as a maritime hub is a
matter of concern. Probably the government will have to explore better ways to channelize more
investments into this sector to trigger growth at a higher pace.

REFERENCES
1. Major Ports in India – Complete List – Day Today GK Retrieved from
www.daytodaygk.com/major-ports-in-india-complete-list/

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2. With a brief overview of Challenges faced by port sector of India ... retrieved from
forumias.com/portal/with-a-brief-overview-of-challenges-faced-by-port-sector-of-ind...

3. Andaman Saravanan Dec 31, 2014: India needs to equip her ports to accommodate
larger ships retrieved from https://andamansaravanan.wordpress.com/.../india-needs-to-
equip-her-ports-to-accommo...

4. Port strategy for India‟s Next Big Leap in Trade, February 2017 Ernst & Young LLP
and Andhra Pradesh Chambers of Commerce and Industry Federation Retrieved from
www.ecmbs.in/wp-content/uploads/Port-strategy-for-India.pdf

5. ibid

6. Major ports of India register 6.79% traffic growth in FY2017, April 12, 2017 retrieved
from www.business-standard.com › News-CM › Economy › News

7. Port strategy for India‟s Next Big Leap in Trade, February 2017 Ernst & Young LLP
and Andhra Pradesh Chambers of Commerce and Industry Federation Retrieved from
www.ecmbs.in/wp-content/uploads/Port-strategy-for-India.pdf

8. ibid

9. January-2011,Press Information Bureau, Government of India, Ministry of Shipping

retrieved from pib.nic.in/newsite/PrintRelease.aspx?relid=69044

10. Achievement Report, updated Mar 31,2017, Ports and Shipping, , Department of
Industrial Policy and Promotion, Ministry of shipping retrieved from

11. ibid

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