The ports and shipping sector in India is witnessing a significant transformation, with a plethora of initiatives and projects being implemented to drive the sector’s overall development. New measures for sustainable growth and the launch of new projects in areas such as cruise shipping, roll-on/roll-off (ro-ro), multimodal logistics parks (MMLPs), and shipbuilding and repair provide opportunities that can be tapped for further growth.
To provide a fillip to the blue economy, the Maritime Amrit Kaal Vision 2047 was launched in October 2023. This long-term blueprint for the Indian maritime economy outlines strategic initiatives aimed at enhancing port facilities, promoting sustainable practices and facilitating international collaboration. It aims to quadruple port capacity to 10,000 million tonnes per annum by 2047, and secure 100 per cent public-private partnership for 12 major ports in the country. According to the vision document, investments worth Rs 80 trillion over the next 25 years will be utilised for goals such as achieving carbon neutrality at all major ports, attaining the highest rank in cruise tourism, developing 25 cruise terminals, more than doubling the number of operational waterways, reaching 500 million tonnes of cargo and becoming the leading nation in ship recycling. Of six identified port clusters, four will be developed as mega ports by 2047.
Cruise shipping
India is witnessing an increased uptake of cruise shipping. This increasing focus on the cruise sector and the promotion of cruise tourism is being driven by potential benefits such as a positive economic impact and a likely increase in jobs, and to earn foreign exchange. According to industry estimates, the economic potential of cruise tourism in India is expected to increase from $110 million to $5.5 billion in the years to come. India also aims to become a premier cruise hub in the Asia–Pacific region under the Maritime India Vision (MIV) 2030. Its measures to incentivise and promote cruise shipping include prioritising berthing vessels over cargo vessels, introducing a rationalised cruise tariff and providing discounts to cruise ships ranging from 10 per cent to 30 per cent based on the volume of their calls.
Meanwhile, in January 2024, the Ministry of Ports, Shipping and Waterways (MoPSW) announced an investment worth Rs 450 billion to develop river cruise tourism. Of this, an estimated amount of Rs 350 billion has been earmarked for cruise vessels, and Rs 100 billion for the development of cruise terminal infrastructure by 2047. Moreover, the MoPSW launched the River Cruise Tourism Roadmap 2047 and the Harit Nauka guidelines in January 2024. Further, the Inland Waterways Development Council is also looking to expand of the capacity of operational waterways for river cruise tourism in the future.
Ro-ro service
Ro-ro services are vital for the movement of cargo (chiefly automobiles) from manufacturing centres to locations outside and within India. Ports that handle ro-ro traffic include Mumbai, Mundra, Chennai, Kattupalli, Kamarajar, Deendayal, Krishnapatnam, Kandla and Pipavav. While some ports have dedicated ro-ro terminals, others are utilising either general cargo berths or non-functional dedicated cargo berths to handle such traffic.
The government has been taking measures in this space. For instance, under the Sagarmala programme, funds worth Rs 428.7 million have been released (as of February 2024) for projects such as development of ro-ro/ro-pax ferry services in Gujarat for greener urban travel, enhancement of port facilities in Andhra Pradesh and Karnataka to increase cargo handling capacity and safety measures, and introduction of environment–friendly ro-ro facilities in Cochin.
MMLPs
The setting up of MMLPs is also expected to provide numerous opportunities for growth in the ports and shipping sector. MMLPs can enhance first- and last-mile connectivity and improve logistical efficiency, enabling sustainability. They are also likely to enable intermodal movement of freight and lower the overall freight cost and time, improve the tracking and traceability of consignments, and provide efficient warehousing.
Five MMLP projects are being implemented by major ports. Of these, four are being developed by the Jawaharlal Nehru Port Trust, namely, Niphad, Wardha, Jalna and Ranjani, all located in Maharashtra. Another MMLP at Jolarpet is being implemented by the Chennai Port Trust. Moreover, the Container Corporation of India Limited-owned Gati Shakti multimodal cargo terminal on the Jajpur-Keonjhar road, Odisha, popularly known as MMLP Jajpur, was inaugurated in March 2024. Simultaneously, its first container train was flagged off, travelling from the terminal to the inland container depot in Dadri, Uttar Pradesh.
Shipbuilding and repair
Shipbuilding is one of the top priority areas for the MoPSW. In January 2024, shipbuilding projects worth Rs 40 billion were inaugurated at Kochi. These include a new dry dock and the international ship repair facility (ISRF) at Cochin Shipyard Limited (CSL). They are likely to strengthen India’s position in the global maritime sector, in addition to creating additional jobs and support for small businesses. The ISRF will also lead to an expansion and modernisation of the existing ship repair capabilities of CSL, and transform Kochi into a global ship repair hub.
Various initiatives are being taken by the government to create shipbuilding and repair capacity in the country. To this end, plans have been announced to set up shipbuilding and repair clusters in Mumbai, Kochi, Chennai, Gujarat, Goa, Visakhapatnam, Andaman and Nicobar, and Odisha. The MoPSW is also working towards setting up a centre of excellence in shipbuilding and repair.
In order to encourage domestic shipbuilding, the MoPSW has introduced the Shipbuilding Financial Assistance Policy (SBFAP) scheme for Indian shipyards to procure orders from domestic and international markets. The SBFAP guidelines have been amended to include wind farm installation vessels and the construction of sophisticated dredgers as specialised vessels eligible for higher financial assistance. The guidelines specify financial assistance of 30 per cent for vessels in which the main propulsion is achieved using green fuels such as methanol/ammonia/hydrogen fuel cells, and financial assistance of 20 per cent for vessels with electrical means of propulsion or vessels fitted with hybrid propulsion systems.
Sustainability and the way ahead
With the port and shipping sector becoming a nodal point for green transition, sustainability and a focus on achieving net zero is expected to be a continuing trend. India aims to transition its entire coastal and inland waterways shipping to renewable energy in the next five years, and to achieve net zero carbon emissions by 2070. Currently, the share of renewable energy at India’s major ports is less than 10 per cent. With the objective of assisting developing countries in reducing greenhouse gas emissions from ships, India has been selected as the pioneer lead country for the International Maritime Organisation Green Voyage 2050 project.
Furthermore, the government has identified three strategic hydrogen hubs at Paradip, Kandla and Thoothukudi to spearhead green hydrogen production. At Thoothukudi, a pilot ecosystem is being developed, with 400 acres allocated for companies to set up electrolysers. Reportedly, in April 2024, Reliance Industries Limited, Larsen & Toubro (L&T), the Greenko Group and Welspun New Energy secured land parcels for setting up green hydrogen and green ammonia production units at Deendayal port in Kandla. Moreover, funds have been approved for the conversion of some vessels to run on methanol at the Shipping Corporation of India.
The MoPSW released Harit Sagar, its green port guidelines, in May 2023. The guidelines promote the use of green energy at ports, and the use of greener fuels. Their key focus areas include increasing the green belt area of ports by more than 20 per cent by 2030 and 33 per cent by 2047, electrification of over 50 per cent of port equipment by 2030 and over 90 per cent by 2047, establishing green ammonia bunkers and refuelling facilities at all major ports by 2035, and increasing the share of renewable energy to more than 60 per cent by 2030 and 90 per cent by 2047. Phase-wise development of infrastructure for shore-to-ship power is also a future goal.
In line with the current trends and scenario, the ports and shipping sector is likely to witness a positive outlook in the years to come. Additionally, policies and comprehensive plans such as MIV 2030 and the Amrit Kaal Vision 2047 will lead to the development of additional facilities and provide an overall boost to the sector. However, in order to fully tap the potential of the ports and shipping sector, there is a need to ensure better utilisation of the existing provisions and institutions.
Sidra Siddiquie and Shreya Annie Mathew