Making Headway: Sector progress on the back of government initiatives

Sector progress on the back of government initiatives

The port sector in India is being driven by high growth in external trade. Imports fr­om China soared to almost $100 billion in 2021. Indian exports to China too are steadily increasing. India’s import basket from China comprises electric and electronic goods, auto components, specialty chemicals, machine tools, among others. The export basket to Chi­na comprises non-basmati rice, exotic vegetables, soybeans and fruits.

During 2021-22 (till October 2021), cargo traffic handled by major ports reached 407 million tonnes (mt), a 14.6 per cent increase over the same period last year. Cargo handled at major and non-major ports is likely to return to the 2019-20 level  in 2021-22. The total cargo to be handled at Indian ports is projected to reach 2,500 million tonnes per annum (mtpa) by 2025 from 1,250 mtpa in 2020-21.

Under the Sagarmala programme, 802 projects with an investment of Rs 5.52 trillion by 2035 will be implemented. Of these, 172 projects worth Rs 882 billion have been completed as of August 2021. Around 235 projects worth Rs 2.16 trillion are under implementation.

Government initiatives

In order to achieve the objective of Aatmanir­bh­ar Bharat, the government has approved a scheme to provide Rs 16.24 billion for over five years as a subsidy to Indian shipping companies through tenders for the import of government cargo. This will result in a larger Indian fleet, which will enhance the share of Indian companies in global shipping.

The government launched the Gati Shakti Master Plan for multimodal connectivity with the objective to reduce logistics costs, increase the cargo capacity of railways, increase port ca­r­go capacity, and reduce the turnaround time of vessels. Ports will be linked to eastern and western India through dedicated freight corridors.

In addition, the Major Port Authorities Act, 2021, was notified to revamp the administration, control and management of major ports. Ports will be free to set their tariff based on market forces. This would enhance interport competition.

Smart ports

Smart ports unlock economic growth through digitalisation and automation of ports to make them competitive at national and international levels. The five critical smart port technologies to be adopted are remote-controlled ship-to-sh­o­re cranes, automated rubber-tyred gantry (RTG) cranes, automated guided vehicles, condition monitoring of assets and IIoT, and dron­es for surveillance and deliveries.

The Covid-19 pandemic demonstrated that many ports are still lagging in terms of electronic commerce/data exchange. The pandemic has resulted in accelerating the move towards digitalisation at Indian ports. It needs to be implemented at every level of the EXIM value chain along with the elimination of unnecessary intermediaries.

Key issues and challenges

Connectivity of major ports is one of the key issues faced by Indian ports. There is a huge variance in first- and last-mile connectivity to these coastal facilities. Although a number of initiatives have been taken to improve connectivity from the port to the hinterland, it still remains the biggest cause for concern for the logistics sector, and ports in particular.

A large part of land belonging to major ports is under lease with the Government of India and the state governments, with interest and penal interest levied in cases of unpaid lease rentals. Apart from this, a clear land utilisation policy for industrialisation is the need of the hour for enhancing port traffic.


All major ports should have dedicated berths for coastal shipping. Coastal community development must be promoted. Privatisation needs to be enhanced for attracting capital investments in the sector through the PPP mode. How­ever, tenders should not be prescriptive and bidders should decide the cargo to be handled and equipment to be deployed. Public and private ports must work closely. Private players must be encouraged to take up port development and cargo generation. Thus, industry-led port development should be the main focus. Further, acceleration of digitalisation must be prioritised. It needs to be implemented at every level of the trade value chain, thus eliminating unnecessary intermediaries. The focus should be on enhancing logistics competitiveness and holistic infrastructure development to transform India into a global manufacturing hub. Non-major ports should adopt the Gujarat Maritime Board model for the privatisation of ports. Further, there should be coordination between state and central port projects to generate better returns on investments.

Based on a presentation by Devdatta Bose, Group Sector Head, Ports & Harbours, Tata Consulting Engineers Limited, at a recent India Infrastructure conference