India, with a coastline spanning over 7500 kilometres, is served by 13 major ports and over 200 minor and intermediate ports. According to the Economic Survey 2021-22, enhancing port governance and infrastructure is vital for the development of the infrastructure sector and a crucial element for social and economic transformation.
Nevertheless, the growth of port infrastructure in India has been hindered by various challenges and issues, including:
- Financial limitations: Insufficient investment and inadequate financing have resulted in substandard port infrastructure, particularly in non-major ports.
- Limited private sector participation: The financial viability of port projects is a significant deterrent for private developers and financiers. Greenfield port projects, often located in remote areas, require substantial government support to establish essential infrastructure for site access.
- Regulatory hurdles: Major and non-major ports fall under separate jurisdictions, and the regulatory framework is inflexible. Land acquisition issues and delayed environmental clearances have also impeded port infrastructure development.
- Infrastructure bottlenecks: Lengthy turnover and pre-berthing times, along with high freight costs, reduce the competitiveness of Indian ports. For instance, Singapore’s average ship turnaround time is less than a day, while India’s exceeds two days.
- Aging docks and terminals: Poor maintenance of old ports and insufficient efforts for upgrading them have posed challenges in the development of port infrastructure.
Recognizing the significance of modernizing and expanding port infrastructure, the government has implemented several measures, including:
- Sagarmala project: This initiative aims to modernize India’s ports to facilitate port-led development and promote the development of coastal areas, thereby contributing to India’s overall growth.
- Central Port Authority (CPA) Act: Enacted in 2016, this act grants increased autonomy to major ports.
- Revised Model Concession Agreement (MCA): The MCA provides incentives for private sector involvement in port development. Companies involved in maintaining and operating ports are eligible for a 10-year tax holiday.
- Major Port Authorities Act, 2021: This act regulates and plans the operations of major ports in India, vesting their administrative control in major ports authorities.
- Captive policy for port-dependent industries: A new policy has been formulated to address challenges related to concession period renewal, expansion scope, and creating a dynamic business environment.
- Ease of Doing Business initiatives: Steps have been taken to simplify and digitize processes across major ports by implementing the Enterprise Business System (EBS) by 2021. The development of the National Logistics Portal (Marine) is also underway.
The maritime sector is intricately connected to economic trade and competitiveness. The Maritime Indian Vision 2030 is a positive stride towards enhancing port infrastructure and
providing the necessary momentum for the rapid and efficient expansion of India’s port sector.