India’s ports play a critical role in the global supply chain and are central to the country’s broader vision of enhancing its infrastructure. In recent times, sustainability has assumed greater importance, with plans to ultimately transition to zero-emission ports powered by renewable energy. Challenges like inadequate rail-port connectivity, high regulatory and logistics costs and limited land availability for green projects continue to plague the sector. Looking ahead, global collaborations, the development of industrial port cities, and targeted investments in green energy and human capital will be crucial to making Indian ports more competitive, efficient and future-ready. At a recent Indian Infrastructure conference, Krishna B. Kotak, Chairman, JM Baxi, discussed the need to reimagine the Indian port sector, underlying challenges and the key initiatives for greening ports. Excerpts…
Efforts to enhance port operations
Indian ports are integral to the global supply chain. To maintain this strategic position, the port sector must undergo a transformation – aligned with the broader vision of a reimagined India. Currently, a key issue is the environmental impact of port operations. As carbon taxes loom on the horizon, the sector must make efforts to address its carbon footprint. Cargo movement will soon be scrutinised for its carbon footprint, making the transition to zero-emission ports essential. To this end, simply introducing electric charging infrastructure will not be enough; ports will need to harness electricity generated from renewable sources.
Further, ports cannot exist in isolation. There is a need to establish industrial port cities based on global business models. India’s ports, such as Deendayal port, the Jawaharlal Nehru Port Trust (JNPT), V.O. Chidambaranar port and Visakhapatnam port, are notable examples of industrial port cities. In the coming years, major automobile manufacturers, including Tesla and VinFast, are expected to establish manufacturing facilities in India. These facilities are likely to be located within 5-10 km of key ports. This proximity will reduce transportation costs and improve global competitiveness, crucial for both foreign and domestic manufacturers. Indian companies must also adopt this model, as the domestic market alone is not large enough for them to remain uncompetitive.
Human resource development is another critical area that requires attention. At JM Baxi, significant investments are being made to create a process that nurtures talent and leadership. Around 20-25 per cent of the management’s time is dedicated to building people and leadership teams. This focus on human capital is essential as the port sector expands, and India must prioritise skill development to meet the demands of the coming decade.
Navigating challenges
The improved connectivity at Indian ports, over the years, has led to a phenomenal growth in cargo volumes. However, this growth has also exposed new challenges, particularly in infrastructure and connectivity. Port operations are dependent on seamless connections to roads and rail networks. With storage capacity constraints limiting the cargo capacity to five to seven days, inadequate connectivity will significantly impede cargo handling. This is especially important as the types of transported cargo are changing. For example, India is witnessing increased exports of foodgrains and finished steel, while importing large quantities of raw materials such as ores and coal. To meet these diverse demands effectively, rail-port connectivity must be upgraded.
Another critical issue is cost competitiveness. Developing infrastructure at optimal costs is vital for ensuring operational efficiency. A significant challenge facing the railways is the freight segment being used to subsidise the passenger segment. Consequently, for every tonne of cargo that the railways carry, there is an additional building cost that is passed on to freight. For example, in the case of commodities such as fertilisers and food grains, which are generally transported through rail and are a part of the public distribution system, ports end up paying 40-50 per cent more than the actual transport cost. This is due to the regulatory constraints on these products’ pricing, compromising the sector’s competitiveness.
“India has the potential to capitalise on greenification initiatives.”
Sustainability moves
JM Baxi has set an ambitious target to achieve a zero-carbon footprint by 2027 across all its 11 terminals. To accomplish this, the company spent a year meticulously mapping the operations of each terminal, assessing variables such as vehicle count, crane usage and generator operations, among others. This process revealed that the most viable option for reducing carbon emissions was to generate electricity internally. To this end, JM Baxi is building a solar plant with a capacity of 11.5 MW to meet its energy needs, thus reducing reliance on external energy providers and avoiding exorbitant tariffs charged by distribution companies. However, a major challenge faced here is the amount of land required. According to the company’s calculations, around 5 acres of land is needed to generate 1 MW of electricity through solar plants. Thus, land acquisition continues to be a hindrance, as land is scarce near major ports like JNPT, Paradip and Visakhapatnam, and not all the ports offer subsidies for | these initiatives.
The company also conducted a study to understand the potential of wave energy for dredging operations, but found that the electricity generated would not be sufficient for the task. Despite these challenges, JM Baxi remains committed to achieving its zero-carbon goal by 2026, a year ahead of schedule. This initiative is expected to create a competitive advantage for Indian produce, while the company works on ensuring that every tonne of cargo passing through its terminals is certified as zero carbon.
Future focus areas
The future of Indian ports requires a tailored approach, as a one-size-fits-all solution will not be effective. India’s manufacturing centres are spread across various regions, each with its own requirements. For instance, automobile manufacturing is concentrated in Chennai, Pune and Gujarat, necessitating separate infrastructures for each region. In contrast, countries like the US and China, as well as parts of Europe, have created specialised hubs for industries like petrochemicals, agriculture and steel. Further, categorising ports into various categories such as coastal, intermediary and transshipment is not possible, as economies of scale will be compromised. India must also avoid fragmenting its resources into too many small ports, as economies of scale are crucial for efficiency. The initial debate around the Sagarmala project, whether to focus on 70-80 small ports or 20-30 large ports, suggests that concentrating resources on fewer, larger ports will deliver better results.
Land and regulatory costs constitute a substantial part of the total cost incurred by a business. In order to enhance the ease of doing business, there is a need to enthuse and engage various government authorities. Collaboration efforts with government authorities have been successful in resolving issues around ports like Vadhavan and Paradip, which initially faced significant public opposition.
The way forward
All in all, India’s port sector must engage with global leaders to facilitate the efficient deployment of green energy and alternative fuels for vessels. Ports like Kandla, Paradip and V.O. Chidambaranar are positioning themselves as green hydrogen hubs, a step that could lead to the development of green methanol for vessels. While this is still in the early stages, India has the potential to capitalise on greenification initiatives, including agreements to produce alternative fuels such as ammonia. The offtake agreement signed between Greenko ZeroC and the Singaporean government is a prime example of how international collaboration can help India transition towards a sustainable and competitive port sector.
JM Baxi has set an ambitious target to achieve a zero-carbon footprint by 2027 across all its 11 terminals.
