Shaping the Port of the Future

Syllabus: GS3/Economy; Infrastructure

Context

• India’s maritime sector is undergoing a transformation with the recent development of Vizhinjam International Seaport, the country’s first deep-water container transshipment port.

Port-Led Development in India

History of India’s Port Economy:

• Ancient India: Lothal (Gujarat), Muziris (Kerala), and Arikamedu (Tamil Nadu) served as vibrant centers of Indo-Roman, Indo-Greek, and Southeast Asian trade.
• Medieval India: Ports like Surat, Calicut, and Masulipatnam emerged as key hubs for trade with Arabs, Persians, Chinese, and Europeans.

Current Status:

• India has a vast coastline with 13 major ports and over 200 non-major ports.
  • The major ports are wholly owned by the Government of India and governed by the Major Port Authorities Act, 2021.
  • All the Non-Major Ports (minor ports) are governed under the Indian Ports Act, 1908.
    • Recently, the Union Government introduced Indian Ports Bill 2025 to amend the Indian Ports Act, 1908.
• Cargo Handling: Around 95% of India’s EXIM cargo by volume and 70% by value.
  • India ranks among the top 20 countries in global shipbuilding (2024–25).
  • Two Indian ports, Jawaharlal Nehru Port Authority (JNPA) and Mundra Port, are among the top 30 globally.
• World Bank’s Logistics Performance Index (LPI), 2023:
  • 22nd Rank in the Global Ranking in International Shipments Category 
  • 38th Rank in Logistics Performance Index.

Benefits of a Robust Port Economy

• Geostrategic Value: Ports enhance India’s maritime influence and support initiatives like Security and Growth for All in the Region (SAGAR) and Project Mausam.
• Regional Development: Port-led industrial zones catalyze infrastructure growth and attract private investment in hinterland regions.
• Environmental Efficiency: Well-managed ports reduce carbon emissions by improving turnaround times and facilitating modal shift to railways/inland waterways.
  • Turnaround time is the time a ship spends at port from arrival to departure.
  • Inland Water Transport (IWT) emits 50% less CO₂ per tonne-km than road transport.
• Employment Generation: Ports directly and indirectly support millions of jobs in logistics, warehousing, and ancillary sectors.

Challenges

• High Logistics Costs: India’s logistics cost is about 13-14% of GDP, compared to 8-9% in developed economies.
• Dependency on Foreign Ports: Major transshipment activities rely on foreign establishments due to lack of domestic deepwater capacity.
  • Port Congestion, procedural inefficiencies and lack of digitization lead to delays, reducing global competitiveness.
• Environmental Concerns: Port construction and dredging damage coastal ecosystems and marine biodiversity.

Key Initiatives Driving Port-Led Development

• Sagarmala Programme (2015): Over 574 projects worth ₹6.01 lakh crore have been identified under the program, covering port modernization, new port development, and inland waterways expansion.
• PM Gati Shakti: It integrates ports, railways, highways, and airways to create a seamless logistics network.
  • It focuses on reducing ship turnaround time, improving cargo handling efficiency, and doubling port capacity.
• Amrit Kaal Vision 2047: It builds on the Maritime India Vision 2030 and encompasses aspirations in Logistics, Infrastructure, and Shipping, supporting India’s ‘Blue Economy’.
• One Nation One Port (ONOP) Process: It focuses on mapping and standardizing port processes and documentation, and anticipated to significantly reduce paperwork by approximately 25% for both container operations and bulk cargo, leading to a reduction in logistics costs.

Conclusion

• The deep-sea port at Vizhinjam has the potential to trigger an economic boom similar to Shenzhen, China’s first Special Economic Zone (SEZ), which turned the city into the Silicon Valley of China, provided that governments, concessionaires, businesses, and local communities work together to build a strong and sustainable investment ecosystem.

Source: TH