PORTS IN INDIA

Indian Economy: Policy and Performance

Group 9

Group members:

Dona Elizabeth Joe (2101711018009)

Kuzhali V(2101711018021)

R Elakhiya(2101711018025)

Abhishek Kumar C(2101711018041)

Benjamin Jose(2101711018046)

INTRODUCTION

Growth, development and prosperity of a country is mainly and directly dependent on

agriculture and industry. Agricultural and industrial production have common dependence on
trade transportation services which includes railways, roadways, shipping and
communication facilities. One such important and significant mode of trade transportation is
shipping. Water transport is of two divisions – one is inland water transport and the other is
coastal or marine transport. One of the most efficient way of conducting international trade is
through maritime trade transportation, it is also known as the backbone of global trade.
Maritime transport is a critical infrastructure for the economic development of the country. It
influences the pace, structure and pattern of development of a country.

1
In that ports are node like structure in national and international maritime transport and trade
that provide a vital link in the transportation chain. Ports provide the necessary economic
environment to induce economic and industrial activity and thus act as a catalyst in
socioeconomic development of a region. With the rising volume of world trade, the ports
have gained importance as majority of global merchandise trade is handled by ports. India
has an extensive coastline of approximately 7,517 km spread on the western and eastern
shelves of the mainland and also along the island. There are 13 major and 205 minor and
intermediary ports making India the sixteenth-largest maritime trading country in the world.
The 13 major ports are Chennai- Tamil Nadu, Kochi- Kerala, Ennore-Tamil Nadu, Kolkata-
West Bengal, Kandla-Gujarat, Mangalore-Karnataka, Mormugao-Goa, Mumbai Port Trust-
Maharashtra,
Jawaharlal Nehru Port Trust (Nhava Sheva), Navi Mumbai- Maharashtra, Paradip- Odisha,
Tuticorin- Tamil Nadu, Visakhapatnam- Andhra Pradesh, Port Blair- Andaman & Nicobar
Islands. Six new mega ports are to be developed by Sagarmala Project.

All the 13 major ports are managed by the Port Trust of India and the minor ports come under
the jurisdiction of the respective state governments. Approximately 95% of the country’s
trade by volume and 68% by value is made through maritime trade transport. Ministry of
Shipping was formed in 2009 by bifurcating the erstwhile the Ministry of Shipping, Road
Transport and Highways into two independent ministries. After that, the name of the ministry
was changed into Ministry of Ports, Shipping and Waterways in 9th November 2020. This
ministry encompasses within its fold shipping and port sectors which also involves
shipbuilding and ship repair, major ports and inland water transport. The ministry is
responsible to formulate policies and programs in these sectors and their implementation.
Historically investments have been made particularly in ports by the government mainly
because of large resource requirement, long gestation period, uncertain returns and a number
of externalities associated with that. However the private participation is recently encouraged
by the ministry in the ports.

Many plans emphasis on the development of ports, mainly the 11th plan. As ports play a
significant role in economic development it is necessary to have adequate amount of budget
allocation towards the development of it. Ports are the important means of international trade.
India’s goal to become a global manufacturing hub asks for a lot of contribution from ports.
During this FY24 Indian is aiming at maximizing its exports up to $900 billion, for this ports
will act as the gateway to the country’s economic aspirations of becoming a $5 trillion
economy by facilitating the movement of raw materials, finished products, and other
commodities. With all these we can say that ports are like engines for Indian economic
development.

HISTORY OF PORTS
India's history is intricately woven with its maritime legacy, and the evolution of its ports
stands as a testament to its rich cultural and economic heritage. With a coastline stretching
over 7,500 kilometres, India's ports have played a pivotal role in connecting the subcontinent
2
with the rest of the world. From ancient civilizations to the contemporary era, the history of
ports in India unfolds a narrative of trade, cultural exchange, and strategic significance.

The roots of India's maritime history trace back to the ancient port of Lothal, dating back to
around 2400 BCE during the Indus Valley Civilization. Lothal, situated in present-day
Gujarat, exemplified advanced urban planning and maritime technology, serving as a hub for
trade with Mesopotamia and beyond. The ancient Indians mastered the art of shipbuilding
and navigation, establishing connections with diverse cultures across the seas.

During the medieval period, ports along the western coast, such as Dabhol in Maharashtra,
flourished as vital trade links with the Middle East. The Malabar Coast, with ports like
Calicut, emerged as a vibrant centre for spice trade, attracting traders from Arabia and China.
These maritime connections fostered cultural exchanges and contributed to the prosperity of
coastal regions.

The advent of colonial powers further reshaped India's maritime landscape. European powers
such as the Portuguese, Dutch, French, and British recognized the strategic importance of
coastal areas for trade and military purposes. The Portuguese established strongholds in
places like Goa, with ports like Mormugao serving as both trade hubs and naval bases. The
Dutch, active along the Coromandel Coast, developed ports like Nagapattinam, while the
French established their presence with ports like Pondicherry and Mahe. British dominance in
the 18th and 19th centuries led to the development of major ports such as Bombay, Calcutta,
and Madras. Post-independence, India set sail on a journey of modernization. The focus
shifted towards upgrading existing ports and establishing new ones.

The history of ports in India is a tapestry woven with threads of commerce, culture, and
resilience. From the ancient seafaring exploits of Lothal to the contemporary efficiency of
private ports, each chapter has added a new layer to India's maritime narrative.

Sagarmala

The Sagarmala programme is the flagship Programme of the Ministry of Ports, Shipping and
Waterways to promote port-led development in the country by taking advantage of India’s
7,500 Km long coastline, 14,500 km long potentially Navigable waterways and the strategic
location On major maritime trade routes. The core vision Of the Sagarmala programme is to
reduce the Logistics cost for EXIM and domestic trade with Minimal infrastructure
investment.

The concept of Sagarmala was approved by The Union Cabinet on 25th March, 2015.Hon’ble
Prime Minister released the National Perspective Plan (NPP) for the holistic Development of
the Indian Coastline and Maritime Sector on 14th April, 2016. Currently, a total of 802
projects worth Rs. 5.53 Lakh crore are part of Sagarmala Programme. Out of these, 172
projects worth of Rs. 88,235 crore have been completed and 235 Projects worth Rs. 2.17 lakh
crore are under Implementation.

3
Maritime Vision 2030

It is a ten-year blueprint for the maritime sector which was be released by the Prime Minister
of India at the Maritime India Summit in November 2020.It supersede the Sagarmala
initiative and aims to boost waterways, give a fillip to the shipbuilding industry and
encourage cruise tourism in India.

Policy Initiatives and Development Projects:

Maritime Development Fund: A Rs. 25,000-crore fund, which will provide low cost,
longtenure financing to the sector with the Centre contributing Rs. 2,500 crore over seven
years.

Port Regulatory Authority: A pan-India port authority will be set up under the new Indian
Ports Act (to replace the old Indian Ports Act 1908) for enabling oversight across major and
non-major ports, enhance institutional coverage for ports and provide for structured growth of
the ports sector to boost investor confidence.

Eastern Waterways Connectivity Transport Grid project: It will aim to develop regional
connectivity with Bangladesh, Nepal, Bhutan and Myanmar.

Riverine Development Fund: Calls for extending low cost, long-term financing for inland
vessels with the support of a Riverine Development Fund (RDF) and for extending the
coverage of the tonnage tax scheme (applicable to ocean-going ships and dredgers) to inland
vessels also to enhance the availability of such vessels.

Rationalization of Port Charges: It will make them more competitive, besides doing away
with all hidden charges levied by ship liners to bring in more transparency.

Promotion of Water Transport: For decongestion of urban areas, and developing waterways as
an alternative means of urban transport.

India has embarked on a comprehensive revival of its maritime economy though a slew of
policy initiatives and development programmes. Sagarmala and the Maritime Vision 2030
have clearly articulated the milestones to be achieved. However, there are challenges within.
The political leadership over the years, despite appreciating the importance of the maritime
domain towards furthering India’s strategic ambitions has been unable to drive the change
required to make India a maritime power. There is a need for an Ocean Governance
Architecture under a single maritime authority to shape and implement policy. Presently,
ocean and marine issues are dealt with by a plethora of ministries and departments with
differing priorities. The government must overcome its bureaucratic dogmas and harness
India’s famed entrepreneurial spirit by creating an enabling environment with a fair
regulatory framework and timely financial incentive to compete globally. Despite India’s vast
Exclusive Economic Zone and seabed mining rights in the Central Indian Ocean Basin,
knowledge about what lies beneath the surface of the sea is grossly inadequate. Even the
Chief of the Naval Staff in his recent Navy Day press conference alluded to the importance of
underwater domain awareness. The centre-state interaction in the maritime domain should

4
work in the spirit of cooperative federalism towards achieving outcomes where the whole is
greater than the sum of its parts. A comprehensive all-of-government approach towards
developing a Blue Economy will require a deep understanding of the maritime domain in its
entirety if India wants to be among the first movers in what is clearly going to be the
developmental model for the future.

DEVELOPMENT OF PORTS AND PRIVATE PARTICIPANTION

Public-private partnerships involve collaboration between a government agency and a
private-sector company that can be used to finance, build, and operate projects, such as public
transportation networks, parks, and convention centers.

Post liberalization in the 1990s, the number of projects under public private partnerships
(PPP) in India have increased exponentially, with a view to redefine performance through
capacity augmentation, efficiency and Productivity enhancement as well as increased
competition. Subsequently, the port privatization programme was flagged of in India in 1997,
which, apart from the aforementioned dynamics, also saw the infusion of fresh funding –
including foreign investments – in the ports sector. Nhava Sheva International Container
Terminal (NSICT) at Jawaharlal Nehru PortMaharashtra, was the first terminal that was
developed on PPP basis. Th3table below provides a glimpse of the current PPP projects in the
ports sector.

Number of PPP Projects at Ports (Excluding Captive)*

Source:www.pppindia.org

The PPP has enabled managing port operations and new port infrastructure development that
was exclusively the functions of the government. The port sector was constrained by limited
capacity, traditional infrastructure and poor equipment levels. These were resolved by roping
in the private sector to make ports globally competitive.

PPP Projects:

The PPP investment numbers are mind-boggling in the port sector with nearly 300 PPP
projects costing ₹3,47 lakh crore taken up as of December 2019. The Sagarmala Programme
has identified 123 PPP projects at an estimated investment of ₹2.63 lakh crore. Of this, 29
PPP projects with investment of ₹44,961 crore have been completed and additional 31 PPP
projects worth ₹50,942 crore are currently under implementation. Remaining projects are at
various stages of development. The Ministry of Ports, Shipping and Waterways has identified

5
81 PPP projects costing ₹42,300 crore till 2024-25 for developing major ports’ berths,
terminals and oil jetties.

PPP Projects-Operational Framework:

Private sector participation in infrastructure development requires a framework that would

enable the private sector partner to secure a reasonable return, assure the user of adequate
service quality at an affordable cost and facilitate the Government in obtaining value for
public resources. This is expected to be achieved by establishing clear and transparent norms
for the PPP and by entering into unambiguous and specific contractual relationship.
Government of India initiated various measures such as:

• Issued (October 1996) Guidelines to be followed by Major Ports Trusts for Private
sector participation in the Major Ports;
• Approved (July 2005) a Scheme for Financial Support to Public Private Partnerships
in Infrastructure to be administered by MoF from the budgetary provisions in the
Annual Plans on an year-to-year basis. The quantum of financial support in the form
of capital grant also known as Viability Gap Funding (VGF), is subject to a maximum
of 20 per cent of the total project cost.
• Set up (November 2005) Public Private Partnership Appraisal Committee (PPPAC)6
constituted by the Cabinet Committee on Economic Affairs (CCEA), to be serviced
by the Department of Economic Affairs (DEA) to fast track the appraisal and

approval of PPP Projects of all sectors, where the capital costs of the assets are `250
crore or more;
• Notified (January 2006), Guidelines for Formulation, Appraisal and Approval of PPP
projects
• Prescribed (December 2007), Guidelines for Bidding Process for PPP Projects for
selection of the bidder for award of the project;
• Evolved (January 2008) a Model Concession Agreement (MCA) for private Sector
projects in Major Ports containing provisions aimed at safeguarding the interest of the
Government and other stakeholders; and
• Prescribed (May 2009) Guidelines for Monitoring of PPP Projects, approved by the
Committee of Secretaries in April 2011. Accordingly, the project authorities may
create a two-tier mechanism for monitoring the performance of PPP Projects
consisting of:
(i) PPP Project Monitoring Unit (PMU) at the project authority level; and
(ii) PPP Performance Review Unit (PRU) at the Ministry or State Government Level,
as the case may be.

Government Initiatives:

Over the last few years, the government has taken a number of initiatives to attract private
investments into the ports sector. These include:

6
 • Over last few years, the government has taken several initiatives to attract
private investments into the ports sector.
• Permitting 100 percent foreign Direct Investment (FDI) under the automatic
route.
• Allowing income tax incentives under the Income Tax Act, 1961.
• Formation of joint ventures between major ports and foreign ports, non-major
ports, and private companies.
• Standardization of bidding documents such as request for Qualification (RFQ),
request for Proposal (REP), and the Concession Agreement.
• Replacement of the Major Port Trusts Act, 1963 with the Major Port
Authorities Act, 2021.

MAJOR AND MINOR PORTS IN INDIA

Maritime Transport is a critical infrastructure for the social and economic development of a
country. It influences the pace, structure, and pattern of development. The Ministry of Ports,
Shipping, and Waterways encompass within its fold ports, shipping, and waterways sectors
which include Shipbuilding and Ship-repair, Major Ports, National Waterways, and Inland
Water Transport.

Ministry of Ports, Shipping and Waterways has been entrusted with the responsibility to
formulate policies and programs on these subjects and their implementation. A
comprehensive policy package is necessary to address the diverse issues facing the Maritime
transport sector.

The capacity of the ports in terms of their berths and cargo handling equipment needs to be
vastly improved to cater to the growing requirements of overseas trade. The Ports, Shipping,
and Waterways industries need to be enabled to carry higher shares of the sea-borne trade in
indigenous bottoms. Historically, investments in the transport sector, particularly in the ports,
have been made by the States mainly because of the large volume of resources required, long
gestation periods, uncertain returns, and various externalities, both positive and negative,
associated with this infrastructure.

However, the galloping resource requirements and the concern for managerial efficiency and
consumer responsiveness have led to the active involvement of the private sector in
infrastructure services in recent times. To encourage private participation, the Ministry of
Ports, Shipping and Waterways has laid down comprehensive policy guidelines for private
sector participation in the Ports sector.

Organization History :

DATE OF CREATION OF THE DEPARTMENT:

7
The Department of War Transport was formed in July 1942, by the bifurcation of the then
Department of Communications into two Departments Viz.

1. Department of Posts
2. Department of War Transport.

Functions allocated to it at the time of creation with its organizational history:

The functions allocated to the Department of War Transport including Major Ports, Railways
Priorities, utilization of road and water transport, Petrol rationing, and Producer Gas. Broadly
speaking, the functions of the War Transport Department were to coordinate the demands for
transport in wartime, Coastal Shipping, and the administration and development of major
ports. Later, the planning of export was undertaken as a corollary to the Departments’ control
of transport priorities.

Subsequent changes made in the organizational structure from time to time with dates:

1. During the year 1957, the Department of War Transport was renamed as Ministry of
Transport & Communications, and the Department of Transport was placed under it.

2. In the President’s order of January 25, 1966, the Ministry of Transport was renamed
in the Department of Transport, Shipping & Tourism in the Ministry of Transport and
Aviation.
3. The former Ministry of Transport and Aviation was bifurcated into the Ministry of
Shipping and Transport, and the Ministry of Tourism and Civil Aviation with effect
from 13.03.1967.
4. On re-organization of Ministries/Departments, the erstwhile Ministry of Transport
and, Shipping became the Department of Surface Transport under the Ministry of
Transport with effect from 25.09.1985.
5. On further re-organization of Ministries/Department, the Department of Surface
Transport under the Ministry of Transport was renamed as Ministry of Surface
Transport with effect from 22.10.1986.
6. The Ministry of Surface Transport was subsequently re-organized into departments,
namely the Department of Shipping and the Department of Road Transport and
Highways wise notification dated 15.10.1999.
7. Further wise notification dated 17.11.2000 the Ministry of Surface Transport has been
bifurcated into two Ministries namely the Ministry of Road Transport and Highways
and the Ministry of Shipping.

8. Ministry of Shipping and Ministry of Road Transport has been again merged and
renamed as Ministry of Shipping, Road Transport and Highways wise notification

8
 dated 2.9.2004. There are two Department viz. Department of Shipping and
Department of Road Transport & Highways.
9. In 2009, “The Ministry of Shipping” was again formed by bifurcating the Ministry Of
Shipping, Road Transport, and Highways
10. Further wise notification dated 10.11.2020 the “Ministry of Shipping” has been
renamed as “Ministry of Ports, Shipping and Waterways”.

Allocation and re allocation of functions with reasons for such changes:

1. In view of the imperative need for close coordination of efforts between the
authorities concerned with Railway Development and those concerned with the
development of road communications and transport, the heading of post-war road
planning including ‘Central Road Fund’ and the administration of ‘Motor Vehicles
Act’ were transferred from the Department of Posts and Air to the Department of War
Transport on 15th July 1944.
2. Consequent to passing Section 27-A of the Indian Railways Act, the work pertaining
to Railways Priorities was transferred to the Ministry of Railways with effect from. 1 st
April 1951.
3. The heading Maritime Shipping & Navigation and Lighthouses and Lightships were
transferred from the Ministry of Commerce to the Ministry of Transport with effect
from 1st February 1951.

4. From the year 1952 to 1957 the Ministry of Transport was responsible for general
transport, coordination, and the administration and development of major ports,
maritime shipping, and lighthouses, inland water transport.

Organizational Setup:

Secretary (Ports, Shipping, and Waterways) is assisted by an Additional Secretary, Senior

Economic Adviser, Joint Secretaries Adviser (Statistics), Development Adviser (Ports), and
other officers at the level of Directors, Deputy Secretaries, Under Secretaries, other
Secretariat/Officers and staff.

The Finance Wing is headed by Special Secretary & Financial Adviser who assists in
formulating and processing all policies and other proposals having financial implications. The
Special Secretary & Financial Adviser are assisted by a Deputy Secretary (Fin.), one
Assistant Financial Adviser/ Under Secretary (Fin.), one Under Secretary (Budget), other
Secretariat officers, and Staff.

The Accounts side of the Ministry is headed by a Pr. Chief Controller of Accounts who is
inter alia responsible for accounting, payment, budget, internal audit, and cash management.

Adviser (Statistics) renders necessary data support to various Wings of the Ministry for policy
planning, transport coordination, and economic & Statistical analysis on various modes of
transport with which the Ministry of Ports, Shipping and Waterways is concerned.

9
The following Subordinate/Attached officers, Autonomous Bodies, Societies/associations,
and Public Sector Undertakings are functioning under the administrative control of the
Ministry of Ports, Shipping, and Waterways.

Subordinate/Attached Offices

• Directorate General of Shipping, Mumbai

• Andaman & Lakshadweep Harbour Works, Port Blair.
• Directorate General of Lighthouses & Lightships, New Delhi.

Autonomous Bodies

• Syama Prasad Mookerjee Port Authority

• Paradip Port Authority
• Visakhapatnam Port Authority
• Chennai Port Authority
• V.O.Chidambarnar Port Authority
• Cochin Port Authority
• New Mangalore Port Authority

• Mormugao Port Authority

• Mumbai Port Authority
• Jawaharlal Nehru Port Authority
• Deendayal Port Authority
• Inland Waterways Authority of India, Noida
• Tariff Authority for Major Ports, Mumbai
• Indian Maritime University

Societies/Association

• Indian Ports Association.

Public Sector Undertakings

• Shipping Corporation of India, Mumbai.

• Cochin Shipyard Limited, Cochin.
• Central Inland Water Transport Corporation Limited.
• Hooghly Dock & Ports Engineers Limited.
• Sagarmala Development Company Limited

10
 • Sethusamudram Corporation Limited

Major Ports & Non-Major Ports

There are 12 major ports and 200 non-major ports (minor ports) in the country. While the
Major Ports are under the administrative control of Ministry of Shipping, the non-major ports
are under the jurisdiction of respective State Maritime Boards/ State Government. All the 12
Major ports are functional. Out of the 200 non-major ports, around 65 ports are handling
cargo and the others are “Port Limits” where no cargo is handled and these are used by
fishing vessels and by small ferries to carry passengers across the creeks etc.

India had 13 major ports – Deendayal (Kandla), Mumbai, Mormugao, New Mangalore,
Cochin, Chennai, Ennore (Kamarajar), Tuticorin (V O Chidambaranar), Visakhapatnam,
Paradip and Kolkata (including Haldia) and Jawaharlal Nehru Port. Port Blair which was
notified as major port in 2010 was removed of its status recently.

Major Ports:

The Major Port Authorities Act, 2021 provides for regulation, operation and planning of
major Ports in India. The Act revises the provisions of earlier act and vests the administration,
control and management of such ports to the boards of major port authorities.

The legislation empowers these ports to perform with greater efficiency on account of
increased autonomy in decision making and by modernizing their institutional framework.
These port authorities are empowered to fix scale of rates for port services and assets. PPP
concessionaires are free to fix tariffs based on market conditions etc. This aspect was earlier
governed by Tariff Authority for Major Ports (TAMP), which significantly impacted the
autonomy of the concessionaires. The compact board with professional independent members
also aids in decision-making and Strategic planning.

Major ports derive almost entire revenues from Port related activities, which comprises of
Port services as well as Royalty and revenue shares received from Terminal Operators..

Consumption patterns in the hinterland have a considerable bearing on the type of cargo
handled at Ports. For instance, industrial hinterlands of Maharashtra, Goa, Karnataka, Tamil
Nadu, Andhra Pradesh and Telangana and mineral rich belts of Chhattisgarh, Jharkhand and
Odisha manage large volumes of cargo from coastal areas and the broader hinterland. Ports in
vicinity of refineries such as Cochin, Kandla, Mumbai, and Mangalore have a significant
chunk of POL (Petroleum Oil and Lubricants) traffic, whereas ports close to mines such as
Paradip and Mormugao get a large chunk of their traffic from Coal and Iron Ore mines.

An overview of the major ports is given in the table below:

11
Non major ports:

Non-major ports are all ports that are not classified as major ports under the Indian Ports Act,
1963. Non-major ports include both minor and intermediate ports. These ports come under

the purview of the respective state governments and regulated by state departments, or the
state maritime boards.

12
 REGULATORY FRAMEWORK FOR INDIAN PORTS

The regulatory framework of ports in India is crucial for fostering efficient maritime trade
and ensuring the seamless functioning of these vital economic gateways. The primary
regulatory authority overseeing ports is the Ministry of Ports, Shipping, and Waterways,
which formulates policies and guidelines for the sector.

The major legislative instrument guiding port operations is the Major Port Authorities Act,
2021, which replaced the outdated Major Port Trusts Act of 1963. This modernized
legislation empowers major ports with greater autonomy, facilitating quicker decisionmaking
and operational flexibility. It establishes port authorities to manage and govern these ports,
promoting efficiency and competitiveness.

All 12 major ports are governed under the Major Port Authorities Act, 2021and all minor
ports are governed under the Indian Ports Act of 1908.Major ports are included in the Indian
constitution’s Union list .The Government of India appoints a board of trustees to oversee
each major port . Their responsibilities include port development , management and
operations.

Tariffs in major ports are regulated by the Tariff Authority of Major Ports (TAMP), a
regulatory body established in 1997, in terms of the Major Ports Trust Act, 1963. The roles of
the TAMP include regulating both vessel-related and cargo-related tariffs as well as
regulating rates for lease of properties in respect of Major Port Trusts and the private
operators located therein. Despite being a regulatory body TAMP have limited autonomy
,being largely under the Central Government’s control, and its lack of power to regulate

13
performance and select private parties for contracts and other services implies regulation
limitations.

The Ministry of Shipping, in consultation with the Ministry of Surface Transport, control the
major policy decisions in the port sector in India. The government is envisaging the pursuit of
the objectives of upgrading technology and overall improvement in performance levels by
strengthening the regulatory structures, tariff rationalization, establishing corporate structure
and promoting foreign investment. Policy initiatives have focused on the development of
existing public sector ports, with a segmented approach to privatization, rather than the
development of greenfield projects.

CARGO AT INDIAN PORTS

Port Traffic

As per CRISIL MI&A estimates, port traffic is expected to grow by 3-6% in fiscal 2024, after
growing by 8.2% in fiscal year 2023. The growth in fiscal 2023 was primarily driven by the
robust growth in coal cargo traffic on the back of higher domestic demand due to increased
power requirements in the country.

Coal traffic grew by 26% in fiscal 2023. On the other hand, container traffic remained
sluggish due to macroeconomic headwinds and witnessed a muted growth of 3% in fiscal
2023. Firm coastal movement resulted in a growth of 7% for the overall iron ore traffic at
Indian ports. POL traffic increased 5% in fiscal 2023 due to revival of demand across all
enduser industries.

In fiscal 2024, the growth in port traffic is expected to moderate to 3-6%. Coal traffic is likely
to grow by 2-7% due to flattish imports. Similarly, container traffic is also expected to be
slightly higher at 4-7% in fiscal 2024 due to the low base, higher imports, and cheaper
container prices. Iron ore traffic is expected to register 10-15% growth in fiscal 2024.
Contrastingly, the growth in POL traffic would be subdued at 2-5%.

Over fiscals 2024-2028, growth at Indian ports is expected to be at 3-6%. However, factors
such as tapering growth in coal due to import substitution along with plateauing of iron ore
exports and muted growth in POL segment led by slower consumption in crude oil are
expected to moderate cargo traffic over long term.

Share of Major ports has been reducing as non-major ports are able to provide better
efficiencies and lower turnaround time (TAT) with competitive rates. Over the next 5 years,
non-major ports are expected to grow at a pace like major ports due to a fall in imports &
slight growth in coastal traffic.

Overall traffic at Indian ports

14
Cargo handled at Indian ports in FY22 and FY28F (in million tonnes)

Traffic at major ports

Maritime transport activity is driven by developments in world economy, viz, growth in

world Output and trade. Thus, volume of seaborne cargo traffic handled by ports is mainly
shaped by the levels and changes in both the global and domestic activity. In fiscal 2023,
cargo traffic at major ports in India saw a rise of 8.7%, higher than the growth levels of 7.0%
in fiscal 2022. This was attributable to the revival in economic activity in India, rising crude
oil imports and a strong rebound in the container traffic. In fiscal 2024, it is expected that
traffic at major ports to grow by 3-6%, led by growth in traffic in the coal & POL segments
and recovery in container traffic. Over fiscal 2024 to fiscal 2028, traffic at major ports is
expected to be in the range of 3-6%, therefore maintaining a steady pace of growth.

15
Traffic at non major ports

In fiscal 2023, cargo traffic at non-major ports in India saw a rise of 7.6%, higher than the
growth of 4.7% in fiscal 2022 led by a strong rise in POL and coal traffic. In fiscal 2024, the
traffic at non-major ports is expected to grow by 3-6% led by a recovery in container traffic.
Over the fiscal period 2024-2028, we expect non-major ports to grow at 3-6%. This would be
largely due to moderation in POL traffic and coal imports at non-major ports.

Coal traffic would moderate over the medium term as thermal coal imports are expected to
slow down with steady increase in Coal India production. POL consumption would also
moderate due to alternative fuels and higher efficiencies of automobiles.

SIGNIFICANCE OF PORTS FOR INDIAN ECONOMY

• Facilitating international trade

• Employment Generation

• Boosting Economic growth

• Revenue generation
• Provides Connectivity
• Strengthening of national security

16
 • Regional Integration

• Environmental protection

Inland Waterways Development:

India has an extensive network of rivers and canals, which have the potential to serve as a
cost-effective mode of transportation for bulk goods.

• National Waterways Act: The National Waterways Act was passed in 2016,
which declared 111rivers across the country as national waterways. This
development of waterways allowed as a means of transportation and opened
up opportunities for private sector investment.

• Development of National Waterways: the government of India is developing

several national waterways across the country, including the GangaBhagirathi-
Hooghly river system, Brahmaputra river, and West Coast Canal. The
development of these waterways includes the construction of jetties, terminals,
and dredging of water channels to improve navigability.

• Multi-model terminals: Development of multi-model terminals on the national

waterways is to promote the use of inland waterways for transportation. These
terminals provide seamless connectivity between inland waterways, highways
and railways, and will reduce the logistics cost of transportation.

• Inland Waterways Authority of India (IWAI): The IWAI is the nodal agency
responsible for the development and regulation of inland waterways in India.
The IWAI is implementing several projects for the development of national
waterways, including the construction of jetties, terminals, and navigational
aids.

CHALLENGES FACED BY PORTS IN INDIA

• High turnaround times

• Port Congestion

17
 • Sub-optimal Transport Modal Mix

• Limited Hinterland linkages

• Issues with Regulations

• Issues with PPP Model

• Social impacts of Port Development

• Unhealthy Competition

11th FIVE YEAR PLAN AND IT’S EMPHASIS ON DEVELOPMENT OF

PORTS IN INDIA
The 11th plan took place during the year 2007 – 2012. The fast growth of the economy in
during that time has placed increasing stress on physical infrastructure such as electricity,
railways, roads, ports, airports, irrigation, and urban and rural water supply and sanitation, all
of which already suffer from a substantial deficit from the past in terms of capacities as well
as efficiencies in the delivery of critical infrastructure services. The pattern of inclusive
growth of the economy projected for the Eleventh Plan, with GDP growth averaging 9% per
year can be achieved only if this infrastructure deficit can be overcome and adequate
investment takes place to support higher growth. The plan was launched by the then Prime
Minister of India, Dr Manmohan Singh, on December 18, 2007. The 11th FYP focused on
infrastructure development with an investment target of US$500 billion.

Infrastructure—Deficit and Eleventh Plan Physical Targets with regard to Ports.

The relative role of the public and private sectors will vary. In areas like capital dredging at
major ports as well as in certain economically or situationally disadvantaged regions, the bulk
of the investment in infrastructure would have to come from the public sector. Available
public sector resources must therefore be directed to these sectors as a matter of priority.
Precisely for this reason, PPPs must be seriously explored in other areas.

18
The investment required by the Central and State Governments and the private sector in each
of the ten major physical infrastructure sectors for sustaining a growth rate of 9% in GDP

over the Eleventh Plan (2007– 08 to 2011–12) and corresponding to the quantitative targets
for the Eleventh Plan. The total investment amounts to Rs 2056150 crore. This level of
investment amounts to an average of 7.6% GDP during the Eleventh Plan as a whole. The
telecom, transportation (comprising ports and airports), and storage improve their share in the

total investment in the Eleventh Plan as compared to their share in the Tenth Plan.

Projected investment in infrastructure during the eleventh five year plan

19
Adequate rail-road connectivity of ports with the hinterland is of crucial importance. The 11th

five year plan proposes to improve this on a high priority basis. Besides, the government
along with the Port Trusts and major users would take up development of common user
facilities.

CONCLUSION

In conclusion, the maritime landscape of India has undergone a transformative journey,

encapsulated by the rich history of Indian ports. From ancient times when seafaring
civilizations engaged in trade to the present era marked by technological advancements, ports
have played a pivotal role in shaping India’s economic destiny.

The evolution of maritime trade in India has been a testament to its resilience and
adaptability. From the historical Silk Route to the present global trade network, Indian ports
have been crucial nodes connecting the nation to the world.

20
The development of ports, marked by strategic planning and private participation, has been a
significant driver of change. The infusion of modern technology and private sector
involvement has not only enhanced efficiency but has also positioned Indian ports as key
players in the global trade scenario.

A closer look at major and minor ports reveals a diverse network catering to different trade
needs. The emergence of Jawaharlal Nehru Port Trust as a leading container port signifies
India’s commitment to staying competitive in the global maritime arena.

Ports have not merely been conduits for goods; they have been engines propelling Indian
economic development. The connectivity provided by these maritime gateways has spurred
industrial growth, facilitated trade, and contributed to regional and national economies.

As India sets ambitious economic plans, the emphasis on the development of ports remains
integral. These plans recognize the crucial role of ports in driving economic growth,
promoting international trade, and fostering global partnerships. The commitment to further
modernization, sustainable practices, and private sector collaboration underscores the
government’s vision for a robust maritime infrastructure.

In essence, the saga of ports in India reflects a dynamic narrative of progress, adaptation, and
economic vitality. From historical trade routes to the contemporary era of cutting-edge
facilities, Indian ports continue to be instrumental in steering the nation towards prosperity on
the global stage.

REFERENCES

• Datt and Sundaram’s Indian Economy book

• https://shipmin.gov.in/sites/default/files/99169721-cdpVol%201.pdf
• https://www.india.gov.in/website-planning-commission
• https://www.sagarmala.gov.in/project/port-modernization-new-port-development
• https://en.m.wikipedia.org/wiki/List_of_ports_in_India
• https://shipmin.gov.in/about-us/organisationalsetup
• https://shipmin.gov.in/about-us/organization-history
• https://www.shipmin.gov.in/division/ports-wing
• https://www.orfonline.org/research/maritime-india-the-quest-for-a-steadfast-identity
• https://shipmin.gov.in/sites/default/files/MIV%202030%20Report.pdf
• https://pib.gov.in/PressReleasePage.aspx?PRID=1896934

21
 • https://indiafoundation.in/articles-and-commentaries/indias-maritime-
economydriving-indias-growth/
• https://www.drishtiias.com/daily-news-analysis/maritime-vision-2030
• Krishnamurthy, S. (2017). “Jawaharlal Nehru Port Trust: A Study on Port Efficiency
and Challenges.” International Journal of Research – Granthaalayah
• https://jnport.gov.in/
• • https://ensureias.com
• • https://www.briefindia.com
• https://cag.gov.in/hi
• https://www.dhyeyaias.com/
• https://www.pppinindia.gov.in/
• https://prepp.in/news/e-492-ports-infrastructure-indian-
economynotes#Governance%20of%20ports

https://www.jsw.in/sites/default/files/assets/industry/infrastructure/JSWIL%20Industr
y%20Report%20Ports-Update-Apr-Concise-vf.pdf
• https://cuts-ccier.org/

22