INDIAN PORTS INVESTMENTS

INDIAN PORTS INVESTMENTS:-

                                                According to the Ministry of Shipping, around 95% of India's trading by volume and 70% by value is done through maritime transport. In November 2020, the Prime Minister, Mr. Narendra Modi renamed the Ministry of Shipping as the Ministry of Ports, Shipping and Waterways.

 

In FY20, major ports in India handled 704.82 million tonnes of cargo traffic, implying a CAGR of 2.74% during FY16-20. Thirteen major ports in the country handle a lot of volume of container and cargo traffic. On the west coast, there are the ports of Mumbai, Kandla, Mangalore, JNPT, Mormugao, and Cochin. The ones on the east coast are the ports at Chennai, Tuticorin, Visakhapatnam, Paradip, Kolkata, and Ennore.

 

Mumbai Port is India's largest port by size and shipping traffic. Located in west Mumbai on the western coast of India, the Mumbai Port is situated in a natural harbor.

 

India has 12 major and 205 notified minor and intermediate ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. The Indian ports and shipping industry play a vital role in sustaining growth in the country’s trade and commerce. India is the sixteenth-largest maritime country in the world with a coastline of about 7,517 kms. The Indian Government plays an important role in supporting the ports sector. It has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for port and harbour construction and maintenance projects. It has also facilitated a 10-year tax holiday to enterprises that develop, maintain and operate ports, inland waterways and inland ports.

 

India’s key ports had a capacity of 1,534.91 million tonnes per annum (MTPA) in FY20. In FY21, all key ports in India handled 672.60 million tonnes (MT) of cargo traffic.

 

Merchandise exports reached US$ 255.92 billion in FY21 (until February 2021).

 

The Government has taken several measures to improve operational efficiency through mechanisation, deepening the draft and speedy evacuations.

 

In April 2021, the Competition Commission of India (CCI) approved the plan to acquire 89.6% Gangavaram Port Limited by Adani Ports and Special Economic Zone Limited (APSEZ).

 

In April 2021, Adani Ports signed an agreement with Vishwa Samudra Holdings Pvt. Ltd., to acquire 25% stake of Adani Krishnapatnam Port Limited (Krishnapatnam Port) for a consideration of Rs. 2,800 crore.

 

In March 2021, Adani Ports and Special Economic Zone Limited (APSEZ) announced plans to acquire 58.1% stake in Gangavaram Port Limited for Rs. 36.04 billion. The port is currently owned by DVS Raju and family.

 

In March 2021, Adani Ports announced to partner with John Keells Holdings and Sri Lankan Ports Authority to develop and operate the West Container Terminal of the Colombo Port in Sri Lanka for 35 years.

 

In February 2021, JNPT (Jawaharlal Nehru Port Trust) launched a comprehensive solid waste management project as a part of its green port initiatives.

 

In November 2020, Mormugoa Port Trust (MPT), operator of the western Indian port of Mormugoa, extended concessions on iron ore imports and export freight traffic until June 2021 to help ease India's iron ore shipping trade amidst the COVID-19 pandemic.

 

In November 2020, JSW Infrastructure completed the acquisition of Chettinad Group’s port business for Rs 1,000 crore (US$ 135.50 million). This acquisition will enable JSW Infrastructure to gain ownership and operational control of a deep draft international coal terminal and a bulk terminal at Kamarajar Port Limited (KPL) as well as coal and bulk commodity terminal at New Mangalore Port Trust (NMPT).

 

In October 2020, Adani Ports and Special Economic Zone Limited (APSEZ) completed the acquisition of Krishnapatnam Port Company Ltd. (KPCL) for an enterprise value of Rs 12,000 crore.

 

In July 2020, Adani Ports and Special Economic Zone (SEZ) Ltd, launched an offshore bond offering, raising US$ 750 million.

 

Ports sector in India has received a cumulative FDI worth US$ 1.63 billion between April 2000 and June 2020.

 

In January 2020, DP World launched a new rail service between Kochi and Bangalore to lower costs and reduce transit time between the two cities by >40%.

 

Some of the major initiatives taken by the government to promote the ports sector in India are as follows:

 

On May 10, 2021, JNPT and New Mangalore Port handled 120 tonnes of medical oxygen on a priority basis owing to the COVID-19 pandemic.

 

India is expected to begin full operations in Iran’s Chabahar Port by the end of May 2021. India is building two terminals at the port and will operate them for 10 years

 

In Union Budget 2020-21, the total allocation for the Ministry of Shipping was Rs. 1,702.35 crore.

 

The key ports are expected to deliver seven projects worth more than Rs. 2,000 crore on a public-private partnership basis in FY22. Private sector investments in ports have steadily increased over the last five years, touching an all-time high of US$ 2.35 billion by 2020.

 

The Finance Minister proposed to double the ship recycling capacity of  4.5 million light displacement tonnes (LDT) by 2024; this is expected to generate an additional 1.5 lakh employment opportunities in India.

 

In Union Budget 2021, the government announced subsidy funding worth Rs. 1,624 crore to Indian shipping companies to encourage merchant ship flagging in the country.

 

In February 2021, the Major Port Authorities Bill, 2020 was passed by the Parliament of India. The bill aims to decentralize decision-making and reinforce excellence in major port governance.

 

Increasing investment and cargo traffic point towards a healthy outlook for the Indian ports sector. Providers of services such as operation and maintenance (O&M), pilotage and harbouring and marine assets such as barges and dredgers are benefiting from these investments.

 

The capacity addition at ports is expected to grow at a CAGR of 5-6% till 2022, thereby adding 275-325 MT of capacity.

 

Domestic waterways have found to be a cost-effective and environmentally sustainable mode of freight transportation. The government aims to operationalise 23 waterways by 2030.

 

As part of the Sagarmala project, more than 574 projects worth Rs. 6 lakh crore have been planned for implementation between 2015 and 2035.

 

In Maritime India Summit 2021, the Ministry of Ports, Shipping and Waterways identified a total of 400 projects worth Rs. 2.25 lakh crore investments potential.

 

India’s cargo traffic handled by ports is expected to reach 1,695 million metric tonnes by 2021-22 according to a report by the National Transport Development Policy Committee.

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