India has a coastline of over 7,500 km, encompassing more than 200 notified non-major (minor/intermediate) ports along the coastline and sea-islands. The cargo traffic at non-major ports has been steadily increasing, with significant changes in the commodity composition witnessed over the past few years. The liberalisation of the Indian economy has encouraged private sector participation in port development. As a result, maritime states are actively pursuing the development of non-major ports to meet the growing demands of seaborne trade. Moreover, policies and initiatives are being implemented for the development of greenfield ports in the country.
The government has been actively supporting the development of greenfield ports through a range of policies and initiatives. These include the launch of the Sagarmala project, which aims to modernise and upgrade the country’s ports and shipping infrastructure, with a capital outlay of Rs 8 trillion for the period 2015-35. Further, the government is planning to set up low-cost non-major ports along the coastline. Meanwhile, several other capacity augmentation projects for non-major ports are in the pipeline.
Indian non-major ports have witnessed growth in traffic handled in the last few years. This growth can be attributed to factors such as the presence of captive cargo streams, higher operating efficiency, modern infrastructure and a more diversified cargo basket. Traffic handled at non-major ports increased at a CAGR of 2.77 per cent from 2018-19 to 2022-23. During 2022-23, non-major ports accounted for 45 per cent of the overall traffic handled at Indian ports due to a significant shift of traffic from major ports to non-major ports.
Over the years, the cargo handling capacity of non-major ports has steadily increased from 738 mtpa as of March 2016 to 1,010 mtpa as of September 2022, catering to the growing volume of internal and external trade. During April-September 2022, around 32.3 per cent of capacity was utilised at non-major ports.
Cargo traffic at non-major ports during the period April-May 2023-24 increased by 7.9 per cent to 122 mt from 113.11 mt during the corresponding period of the previous fiscal year. Furthermore, of the total cargo traffic, overseas cargo traffic increased by 5.5 per cent to 97 mt and the coastal cargo traffic increased by 18.8 per cent to 25 mt during the same period in 2023-24. Among all commodities handled at state maritime boards, coal emerged as the highest commodity at 22 mt, accounting for a share of 18.2 per cent, followed by containers at 21 mt (17.4 per cent) and crude petroleum, oil and lubricants (POL) at 16 mt (12.9 per cent) during the aforementioned period. The increase in cargo handling is attributed to the rising global demand for coal and containers.
State maritime board-wise trends
The Gujarat Maritime Board is leading the way in terms of handling cargo traffic. During the period April-May 2023-24, it handled the maximum cargo of 74 mt, accounting for a share of 60.5 per cent, followed by the Andhra Pradesh Maritime Board (16.7 per cent) and the Maharashtra Maritime Board (11.9 per cent). Moreover, the Gujarat Maritime Board handled the maximum overseas cargo at 66 mt with a share of 67.9 per cent, while the Maharashtra Maritime Board handled the maximum coastal cargo at 9 mt with a share of 37.7 per cent. During the April-September period of 2022-23, the Gujarat Maritime Board achieved the highest capacity utilisation at 37.8 per cent, followed by Odisha (32.3 per cent) and Puducherry (27.3 per cent).
Gujarat and Maharashtra have the highest number of non-major ports in the country. Gujarat is endowed with a 1,215 km coastline, which constitutes about one-sixth of the total Indian coastline. Of the 48 non-major ports in Gujarat located along its coastline, 18 are handling cargo. Gujarat has progressed tremendously towards port-led development, as a result of improved infrastructure and connectivity. To further accelerate development in the state, the APM Terminal Pipavav (Gujarat Pipavav Port Limited) is planning to develop a jetty to handle very large container ships at an estimated cost of Rs 8 billion. Maharashtra also has 48 non-major ports, of which only 16 ports are handling cargo. The Maharashtra Maritime Board has made significant improvements in cargo handling, primarily driven by a continuous increase in the demand for coal, POL and iron ore. Currently, the board is planning to construct a jetty (National Waterways 53) at Dombivali.
Opportunities at other state maritime boards
Several measures are being taken to promote development across other non-major ports. These ports can develop hinterland cargo and ancillary cargo markets for other cargoes from landlocked states.
The Odisha state cabinet approved a new port policy on November 18, 2022 with the aim to facilitate private sector investments in the maritime sector and promote the development of ports and port-related industries. Moreover, the policy promotes other maritime ventures such as coastal shipping, marine tourism, development of multipurpose harbours, seaplane connectivity, port facilities and development of infrastructure for shipbuilding.
Furthermore, Andhra Pradesh is witnessing an increase in private participation in collaboration with coastal states. The state government is developing three greenfield ports — Mulapeta port in the north, Machilipatnam port in the centre and Ramayapatnam port in the south of its coast. These ports are being built by the maritime board under the landlord model. Another greenfield port, Kakinada special economic zone port, is being developed under the public-private partnership (PPP) model. The state government laid the foundation stone for Mulapeta port and Machilipatnam port in April 2023 and May 2023 respectively.
In February 2023, the Karnataka government released a proposal to build two all-weather greenfield deep ports in Uttara Kannada district in PPP mode, with the aim to facilitate the state’s economic activities. The port proposed for Pavinakurve in Honnavara taluk will be equipped to handle 14 mtpa, while the port at Keni, next to Ankola, is designed to accommodate 30 mtpa. The construction of the greenfield port has been awarded to JSW Infrastructure Limited.
Taking advantage of the state’s strategic location, the West Bengal government has approved the development of the Tajpur deep sea port. In September 2022, Adani Ports and Special Economic Zone Limited (APSEZL) was selected to develop Tajpur port at a total investment of Rs 250 billion, of which Rs 150 billion is to be allocated for port development while the remaining amount will go towards building related infrastructure. APSEZL also completed the acquisition of Karaikal port in April 2023. The acquisition cost is Rs 14.85 billion. Besides, APSEZL will spend Rs 8.5 billion on upgrading infrastructure at the port.
Despite the existence of a policy for private participation in the port sector, several projects have encountered delays due to issues related to land acquisition, approvals, clearances, etc. For example, in 2010, the Odisha government had signed a concession agreement with Navayuga Engineering Company Limited for the development of Astaranga port in PPP mode. The project is still in its early stages and is facing legal constraints. Other issues and challenges pertain to stringent rules and tariff regulations as well as restrictions placed on non-major ports regarding the types of cargo they are permitted to handle.
The way ahead
Going forward, the growth of non-major ports will be driven by enhanced efficiency, deeper draughts, strong hinterland connectivity and a diversified cargo portfolio. With significant capacity augmentation plans in progress, the share of non-major ports in total traffic is expected to increase further. The development of non-major ports is expected to have a significant positive impact on the efficiency of the supply chain, transportation costs and the overall growth of trade and commerce. There are immense opportunities for private players in the Indian port sector. This requires continued government focus on infrastructure development for non-major ports, flagship programmes and key policies. Ensuring the sustainable and socially responsible development of these ports is vital for the long-term growth of the Indian economy.