The Indian port sector is growing at a fast clip. Cargo traffic movement is exhibiting strong growth, with contributions from both major and non-major ports. In order to develop Indian ports as per global standards, the government has launched the Maritime India Vision 2030, focusing on developing mega ports and transshipment hubs. Modernisation, mechanisation and digitalisation are also taking centre stage in the effort to transition to smart ports. Industry experts comment on the developments and trends in the port sector…
How has the ports and shipping sector evolved over the past few years? What have been the key sector milestones?
The Indian port sector has witnessed remarkable advancements in recent years, with significant improvements in both infrastructure and cargo handling efficiency. Mechanisation, automation, adoption of state-of-the-art technologies, multimodal logistics, inland waterway routes and coastal shipping have led to an increase in operational efficiency, resulting in streamlined cargo handling processes and reduced turnaround times. Policy measures have played a key role in supporting Indian port infrastructure development. Initiatives such as the Sagarmala and Bharatmala Programmes, Maritime India Vision 2030, Harit Sagar guidelines, Gati Shakti National Master Plan and Blue Economy 2047 have provided strategic frameworks for port infrastructure projects.
The Indian maritime sector has achieved some key milestones in the past 10 years, some of which have been achieved due to the strong push from the Ministry of Ports, Shipping and Waterways (MoPSW) as well as the major ports. According to the Logistics Performance Index Report 2023, India has achieved an average container dwell time of three days as compared to four days for countries like the UAE and South Africa, seven days for the US and 10 days for Germany. The report also acknowledges that Indian ports’ turnaround time of 0.9 days is better than that of many countries such as the US (1.5 days), Australia (1.7 days), Belgium (1.3 days), Canada (2 days) and Germany (1.3 days). India has moved up to the 22nd position in global rankings in the international shipments category vis-à-vis the overall 38th rank as per the country’s Logistics Performance Index score.
Moreover, major ports collectively handled a record 795 mt of cargo in 2022-23, registering a 10.4 per cent growth over the previous year. The ports also achieved the highest-ever daily output of 17,239 tonnes, marking a 6 per cent increase from the previous year. Another significant accomplishment was the best-ever operating ratio of 48.54 per cent. The fleet of ships sailing under the Indian flag has expanded from 1,205 in 2014 to 1,526 in 2023, showcasing the country’s commitment to strengthening its maritime presence. This growth has been accompanied by a significant rise in gross tonnage, increasing from 10.3 million in 2014 to 13.7 million in 2023, reflecting enhanced capacity and operational scale.
Over the past few years, the ports and shipping sector in India has undergone significant evolution and transformation. The Indian government has been actively implementing various policies and initiatives to modernise and upgrade the infrastructure, enhance efficiency, and boost trade in the maritime sector. Launched in 2015, the Sagarmala Project is a major initiative aimed at promoting port-led development and optimising logistics to reduce logistics costs. It focuses on developing new ports, enhancing port connectivity, and modernising existing ports to increase their capacity and efficiency. Several ports have undergone capacity expansion and modernisation. For instance, the Jawaharlal Nehru Port Authority (JNPA) has seen the addition of new container terminals to accommodate larger vessels and handle increased cargo traffic. This has enhanced the port’s performance and paved the way for smooth cargo handling. The government has also promoted the development of greenfield ports to tap into the potential of India’s coastline for facilitating trade. Ports like Ennore Port in Tamil Nadu and Vadhavan Port in Maharashtra have been planned and developed under this initiative. India has been focusing on promoting coastal shipping and inland waterways as an eco-friendly and cost-effective mode of transportation. The National Waterways Act has been instrumental in developing and maintaining the country’s inland waterway network.
Besides, improving the connectivity of ports with the hinterland has been a priority. Initiatives like the Dedicated Freight Corridors (DFCs) connecting major ports to key industrial and consumption centres have been launched to facilitate seamless movement of goods. To enhance efficiency and transparency, the port sector has embraced e-governance and digital initiatives. Port Community Systems (PCS) have been implemented to streamline port operations and provide single-window clearance for various services.
To align with global sustainability goals, the port sector in India has also been adopting eco-friendly practices, such as promoting green ports, shore power facilities, and energy-efficient technologies. These milestones highlight the government’s efforts to transform the ports and shipping sector into a more modern, efficient and sustainable ecosystem. The evolution of the sector has contributed significantly to India’s economic growth and its role as a key player in regional and global trade.
What initiatives are being taken to enhance capacity and improve overall operations?
At Essar Ports, we recognise the significance of cost effective and environmentally sustainable logistics solutions for our customers. We have been instrumental in the development of 168 million metric tonnes per annum port capacity in India with similar infrastructure. We are on the cusp of a transformational journey where logistics, energy transition and value-added services are going to play a major role. We have plans to diversify the cargo profile at Salaya Port, making it a multimodal logistics hub. We are also expanding our facility, which will lead to a reduction in logistics costs and drive port-led industrialisation. Last-mile railway connectivity, energy transition enablers (LNG, green ammonia and green methanol) and other clean commodities are some of the high value-added services that are on the horizon. We are also actively pursuing opportunities, both national and international, which are in alignment with our business model.
“We are on the cusp of a transformational journey where logistics, energy transition and value added services are going to play a major role.” Rajiv Agarwal
The Sagarmala programme, launched in 2015, was the first step towards improving major ports in India. The vision of Sagarmala is to reduce logistics costs for both domestic and EXIM cargo with optimised infrastructure investment. From April 2016 to March 2022, 802 projects worth Rs 5.49 trillion have been implemented. Of these, 139 projects worth Rs 86.74 billion have been funded.
With the objective of propelling India to the forefront of the global maritime sector, MoPSW launched the Maritime India Vision 2030 in 2020. This blueprint is designed to ensure coordinated and accelerated growth of India’s maritime sector. In October 2021, the PM Gati Shakti National Master Plan (NMP) was also launched for expanding multimodal connectivity infrastructure to various economic zones. It is a transformative approach for improving logistics efficiency and reducing logistics costs, with a focus on integrating existing and proposed infrastructure development initiatives and ensuring first and last mile connectivity for the seamless movement of people and goods. Another major breakthrough was the launch of the National Logistics Policy, in September 2022, to provide a comprehensive agenda for the development of the entire logistics ecosystem.
Furthermore, the government has identified a pipeline of 81 public-private partnership (PPP) projects worth Rs 423 billion to develop berths and terminals across major ports till 2024-25. The ministry has also identified projects for new road alignments, upgradation of existing roads, and new rail projects to manage freight traffic. Meanwhile, assets across nine major ports have been earmarked under the National Monetisation Programme for monetisation between 2022 and 2025.
“Port and maritime sustainability is a top priority for MoPSW.” Rajiv Jalota
JNPA is actively exploring various avenues to emulate successful practices to enhance capacity and improve operations. These include adopting best-in-class operational processes, leveraging advanced technologies, and implementing customer-centric approaches. The goal is to improve service quality, optimise turnaround time, and provide seamless logistics solutions to meet the evolving needs of the industry. The port has undertaken several initiatives in this direction. These include:
- Terminal expansion: JNPA is working on expanding its existing terminals to increase its cargo handling capacity. This involves the construction of new berths and the installation of modern container handling equipment to handle larger volumes efficiently.
- Port modernisation: JNPA is investing in upgrading its infrastructure and adopting advanced technologies to improve operational efficiency. This includes the implementation of automated systems for cargo handling and streamlining processes.
- Dredging and channel deepening: The authority is engaged in dredging activities to deepen the navigational channels and accommodate larger vessels with deeper drafts.
- Connectivity and logistics improvements: JNPA is working on enhancing its connectivity with hinterland regions through better road and rail links. This would facilitate smoother movement of cargo to and from the port.
- Green initiatives: JNPA is focusing on implementing environmentally sustainable practices to reduce its carbon footprint and minimise the impact of port operations on the surrounding ecosystem.
- Digitalisation and paperless operations: To improve efficiency and reduce paperwork, JNPA is exploring digitalisation initiatives and promoting paperless operations such as electronic data interchange and online documentation.
These initiatives are aimed at bolstering the port’s position as a premier container port in India and the wider region.
“Improving port connectivity with the hinterland has been a major thrust area.” Sanjay Sethi
What technology and digital initiatives are being taken to transition to smart ports?
The pandemic has changed and revolutionised the way the industry operates. It has paved the way for smart and digital ports of the future with advancements such as mechanisation and automation, renewable energy, artificial intelligence, internet of things (IoT), drone technology, seamless connectivity, blockchain technology, hybrid working models and vessel traffic management systems with real-time visibility.
At Essar, we have been investing extensively in developing and building state-of-the-art mechanised terminals that give our customers a competitive edge by reducing their logistics costs. Our investments are aimed at providing economies of scale through deeper drafts, faster turnaround through mechanised systems, system uptime, and logistics efficiency and visibility with the use of technology and digitisation.
An integrated port enterprise business system is being deployed across five major ports – Kolkata, Haldia, Chennai, Mumbai and Kandla. The majority of the processes within these ports will be digitised through this initiative. The NLP Marine is advancing the port community system 1x to its next stage of evolution. This system has the capability to integrate the various systems existing in isolation within the port sector. Individual ports are also looking to automate its various operations. For instance, at Mumbai Port, a state-of-the-art SCADA system for the marine oil terminal is under installation. The Maritime India Vision has identified more than 50 smart port initiatives, which will be rolled out in phases as the basic infrastructure gets upgraded.
JNPA has invested in various automation technologies to streamline port operations. This includes the implementation of container handling equipment, such as modern cranes and gantries, to improve efficiency in loading and unloading cargo. Automation has also been applied to administrative processes, paperless and processing times, thereby expediting cargo movement. The port has also embraced EDI systems to facilitate the exchange of trade-related documents electronically between various stakeholders, including customs, shipping lines, freight forwarders, and terminal operators. This has resulted in faster clearance processes and reduced dwell times for cargo at the port.
Implementing PCS, which acts as a single-window platform for all port-related services, enables seamless communication and data sharing among different entities involved in the port’s functioning. This can lead to better coordination and improved efficiency across the supply chain. To accommodate larger vessels and handle increased cargo volumes, JNPA has invested in expanding and modernising its infrastructure, such as deepening berths, developing new terminals, and enhancing road and rail connectivity to improve access to the hinterland.
Besides, the port has adopted smart port technologies to enhance overall operations. These include the integration of IoT devices, data analytics and artificial intelligence to optimise processes, predict maintenance requirements and manage traffic flow within the port area. In line with global trends, JNPA has also taken initiatives to minimise its environmental impact. This could involve the adoption of green technologies such as the electrification of port equipment and the implementation of sustainable practices in port operations.
In light of the country’s net-zero goals, what measures are being taken to promote green port development?
Essar is focused on investing in our existing operations and in building new assets as a green energy hub, with more efficient, carbon-neutral and new-age technologies, which will be sustainable and aligned to our theme of energy transition. These are aligned to the country’s net-zero goals as well. Essar’s green hub will consist of:
- Providing shore power – reducing maritime emissions from ships in the ports.
- Promoting renewable energy and hydrogen economy including green ammonia and green methanol.
- Green transportation of cargo – mechanised facilities with conveyors; LNG-powered fleet of trucks to move cargo; and diversification of cargo handling products.
- Use of technology to ensure supply chain visibility and enhanced system uptime.
- Providing green tugs for vessel movement and E-RTGs for inland movement.
We believe all of these are essential for the green ports of tomorrow supporting our goal to be net zero.
Port and maritime sustainability is a top priority for MoPSW. In line with this commitment, the Harit Sagar guidelines were launched in May 2023, with the objective of reducing the carbon footprint as well as achieving zero waste from port operations. At Mumbai Port, the number of cruise ships is going to increase every year. Since cruise ships generate higher emissions than cargo ships, a shore power project for cruise ships has been conceived and a feasibility study for the project is underway. In parallel, a carbon inventory exercise is being undertaken to identify scope 1, 2 and 3 emissions. Similar efforts are being made across various major, state and private ports.
A major initiative by MoPSW towards providing greener solutions was the launch of India’s first National Centre of Excellence for Green Port and Shipping in November 2022. The centre’s mission is to develop a regulatory framework and a roadmap for the adoption of alternate technologies in green shipping, ultimately fostering carbon neutrality. On its 150th year anniversary, the Mumbai Port Authority (MPA) launched the Centre of Excellence for ESG and Circular Economy with the aim to solve the harder problem of ESG implementation and circularity in maritime product development. MPA is also a member of the Quad Shipping Task Force, working on the development of green shipping corridors.
JNPA has been taking several initiatives to make its operations more sustainable and reduce its carbon footprint. We have installed a 4.1 MW solar power plant and a 6.75 MW plant is in progress. JNPA is providing shore power supply to tugs and port crafts and planning to provide the same to EXIM vessels by 2030. JNPA has 31 E-RTGCs, which save a carbon footprint of about 2,500 tonnes per year. Additionally, PPP operators are planning to convert existing diesel engine operated RTGCs to electric/hybrid RTGCs. The port has acquired 12 electric vehicles (EVs) in place of diesel vehicles for intra-port transportation. It is also planning to acquire electric buses for employees’ commute. In terms of energy efficiency, we have implemented several measures such as LED lights, BLDC fans, energy efficient HVAC systems and smart lighting to reduce the carbon footprint. We have a waste management system that segregates waste and recycles it to reduce the amount of waste sent to landfills. We have also installed a sewage treatment plant to treat the wastewater generated within the port premises. The development of a green belt within the port premises serves as a habitat for birds and other wildlife. The port’s efforts towards carbon neutrality have been recognised globally, and it has received several awards for its sustainability initiatives. With the upcoming green port policy by the government, it is expected that more ports in India will adopt similar measures to reduce their carbon footprint and contribute towards a greener future. The port is also actively restoring and rejuvenating the lakes as they not only add to the aesthetic beauty of the landscape, but also serve as a crucial component in recharging groundwater, managing water flow to prevent flooding, and hosting a diverse range of flora and fauna that impact the micro-climate.
What are the biggest challenges that the sector faces today?
Port infrastructure development in India faces several noteworthy challenges. The pertinent problems that require prompt action are inadequate last-mile connectivity, congested road and rail networks, low utilisation of existing port infrastructure, unavailability of long-term and low-cost financing options and delays in decision-making. In addition, efficient land acquisition processes and timely environmental clearances are crucial to avoid unnecessary delays. To successfully address these challenges, there is need for a collaborative approach involving the government and the private sector, with streamlined policies. This will give the necessary impetus required to boost the port sector.
The Major Port Authority Act, 2021 has transformed the major port trusts to development authorities. This represents a significant shift for major port authorities that are undergoing a process transformation while also facing a retiring and declining employee strength. Moreover, the PPP model requires several key improvements to ensure its success. While it has been successfully applied to container terminals, other assets, especially land, require a somewhat different approach. Building a strong skill development framework and an innovation ecosystem for the maritime sector will also present challenges and opportunities for learning.
India’s ports and shipping sector plays a vital role in facilitating international trade and economic growth. With a vast coastline of approximately 7,500 km and 12 major ports, India has the potential to be a maritime powerhouse. However, despite substantial progress in recent years, the industry faces numerous challenges that hinder its growth and efficiency. One of the most significant challenges faced by India’s ports is the need for substantial infrastructure development and capacity expansion. The existing ports often struggle with outdated equipment, inadequate storage facilities, and limited draft, leading to congestion and delays. Additionally, the growing demand for trade exacerbates these problems, necessitating massive investments to upgrade and modernise port facilities. Effective connectivity between ports and inland destinations is critical for efficient cargo movement. The ports in our country often face last-mile connectivity challenges, as the road and rail infrastructure connecting the ports to the hinterland may be inadequate or outdated. Improving intermodal transportation is essential to ensure seamless cargo movement and reduce transportation costs. Another point that needs attention is bureaucratic red-tapism and cumbersome administrative processes that can lead to delays in cargo handling, resulting in higher turnaround times and increased costs for shipping lines. Streamlining port operations and digitalising processes could significantly enhance the sector’s competitiveness and attractiveness to global businesses.
India also faces the challenge of balancing economic growth with environmental sustainability. Implementing cleaner technologies, adhering to stricter environmental regulations, and promoting sustainable practices are imperative to reduce the industry’s carbon footprint and minimise its impact on ecosystems. Addressing these challenges will not only enhance the sector’s efficiency and competitiveness but also strengthen India’s position in the global maritime landscape. By implementing robust policies, fostering innovation, and investing in sustainable and secure practices, India can navigate these challenges and realize the full potential of its ports and shipping sector.
What are the key trends that will shape the sector going forward?
The evolving global supply chains will see a shift in trade lanes and the mode of delivery, particularly for energy resources such as oil and gas. At the same time, carbon-neutrality through energy transition will propel the adoption of green infrastructure, which will have sustainability at the core, with mechanised terminals, hydrogen and green economy and EVs gaining prominence. As India charts its way towards a $10 trillion economy with a Logistics Performance Index target of being among the top 10 by 2032, it needs to be backed by incentives for industry-integrated projects and solutions, which deliver logistics efficiency to promote the overall enhancement of India’s port capacity. Amid the changing dynamics, ports and terminals must be ready for the shift with multimodal connectivity, green ports, hydrogen transportation and digitalisation of the supply chain.
The Indian maritime sector is on an upward trajectory, linked with the country’s economic growth:
- The Vadhwan project, undertaken by JNPA, will be India’s first mega port, which will change the country’s logistics landscape.
- Greater Nicobar Port aims to become a transshipment port competing with ports like Singapore and Colombo.
- Chabahar Port holds significant strategic importance as a connecting link with European nations.
- The China Plus One strategy will divert the next generation of manufacturing facilities to India. Given the growing emphasis on ESG investments, sustainable industries in India are expected to rise.
- In the Vision 2047, Mumbai Port is expected to facilitate the development of a ship repair cluster in collaboration with Cochin Shipyard and Mazgaon Dock Limited.
- The transition to green fuels and electrification is expected to usher in a new era of sustainability, powered by ESG reporting regulations such as the BRSR by SEBI.
- The Maritime India Vision 2030 and the blue economy envisage the development of world-class ports and terminals, which are smart, sustainable and deeply integrated with the hinterland to reduce logistics costs as well as emissions.
The Maritime India Vision 2030, proposed by the government, is likely to have a significant impact on the ports industry, revolutionising various aspects of its operations. It focuses on enhancing port infrastructure to accommodate larger vessels, increase cargo handling capacity, and improve efficiency. This could involve expanding existing ports, building new terminals, and implementing advanced technologies for cargo handling and storage. The following trends are expected to continue influencing the industry going forward:
- Digitalisation and automation: The ports and shipping sector is increasingly embracing digital technologies and automation to streamline operations, improve efficiency, and reduce costs. This includes the use of IoT devices, blockchain for supply chain transparency, and autonomous ships and port equipment.
- Sustainability and green initiatives: With growing concerns over environmental impact, the industry is moving towards sustainability. More focus is laid on adopting cleaner fuels, reducing emissions, implementing eco-friendly practices, and investing in green technologies to make ports and shipping more environmentally friendly.
- Larger vessels and port expansion: To accommodate the growing size of container ships and maximise economies of scale, ports are expanding and investing in infrastructure upgrades. This trend is expected to continue as global trade volumes increase.
- Data analytics and predictive maintenance: Data-driven decision-making and predictive maintenance techniques are being implemented to enhance port efficiency, optimise vessel schedules, and reduce downtime.
- Regulatory compliance and security: Compliance with international regulations, especially regarding safety, security and emissions, remains a priority. Ports and shipping companies have to continually adapt to meet evolving standards.
- Global trade and supply chain shifts: Changes in global trade dynamics and supply chain disruptions have a significant impact on the ports and shipping sector. Shifts in manufacturing locations, tariff changes, and geopolitical developments influence trade routes and port volumes.
- Workforce training and skills development: As the industry adopts new technologies, the demand for skilled workers proficient in digital tools and automation increases. Training and upskilling programmes are being developed to meet this demand.