Facts:
- World Bank in its report has mentioned that India must take steps to improve ports and logistics to emerge as an export powerhouse
Importance of Indian Port
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- The Indian port sector plays a vital role in sustaining growth in the country’s trade and commerce.
- It also has an important role in fulfilling India’s dream of achieving greater global engagement and integration with its trading partners.
Measures taken so far
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- Sagarmala programme : leads to port led development, improve coastal economy, modernize ports and integrate them with SEZ.it reduces the logistic costs of shipping
- Industrial clusters are being created along the coast.
- Port rail connectivity corporation has been created with the responsibility of connecting industrial hubs to various ports by trains.
- Make in India gives impetus to the ship building industry
- Port mechanization and modernization programme in order to enhance port infrastructure.
- Recognising the important role port-led development can play in India, the Central government has undertaken several initiatives such as development of new ports, modernisation and mechanisation of the existing ones, and reduction of logistics costs through the implementation of increased waterways transport. These are also in line with the vision of initiatives such as ‘Make in India’.
Measures needed:
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- In terms of infrastructure, it is important to maintain draft to serve bigger vessels, ensure mechanisation of ports through introduction of new equipment and procedures, build new facilities, upgrade existing facilities and automate systems/procedures.
- In terms of policy and regulatory reforms, it is important to streamline tariff determination by TAMP along with a provision for periodic revisions
- ensure transparent and effective contractual arrangements in PPPs
- implement strengthened communication platforms for seamless information flow among stakeholders
- strengthen system integration, ensure paperless clearance of procedures and transactions, develop user information portals, and so on.
Issues faced by various ports
Seaports displayed specific patterns of issues based on differences in geography, infrastructural capacity, operational aspects, contractual arrangements, and so on.
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- Haldia Port, West Bengal, being a riverine port, faces the natural challenge of heavy siltation and inadequate dredging capacities.
- In Paradip Port, Odisha, there is issue of semi-mechanisation and manual handling of critical processes having a cascading effect on overall operational efficiency. It highlights the importance of complete mechanisation of processes to ensure seamless operations and thereby lower down vessel turnaround time.
- Congestion at the approach roads is a common problem observed at the Jawaharlal Nehru Port in Maharashtra.
- Underutilisation of physical infrastructure in particular though is extremely prevalent at another private terminal — the Vallarpadam International Container Transhipment Terminal — at the Cochin Port.
What are the recent targets set by Government?
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- Government has set an ambitious target of capacity addition at 12 major ports by 120 million tonnes in 2016-17
- Government has decided to improve 0perating margin for the major ports to 44 per cent, compared to 39 per cent during 2015-16
Related Notes:
Describe the composition of export and import trade of India and the role of ports in it. (150 Words)
India is a very old participant in world trade. Export consists of Plantation Crops, Agriculture and Allied Products, Ores and Minerals, Leather and Leather Manufactures, Gems and Jewel, Chemical and Related Products, Engineering Goods, Textiles, Handicrafts and Carpets, Cotton Raw Including Waste.
Import consists of Fertilizers, Petroleum Crude and Products, Pearls, Precious and Semi-Precious Stones, Organic and In-organic Chemical.
Importance of Ports:
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- Approximately 95 percent of India’s trade by volume is transported by sea.
- Total sea-borne trade of India, more than 85 per centers shared by Mumbai, Kolkata, Cochin, Chennai and Visakhapatnam.
- The average ship-borne traffic in India is 700 million tonnes per annum India’s 12 major ports are expected to double their annual cargo handling capacity to 1,600 million tonnes (MT) within the next five years.
Besides foreign trade, ports play an important role in internal trade. Inland water transport in India carries about 16 million tonnes of goods each year. With 7500 km coastline and 14,500 km rivers, port play most vital role in India’s economic growth.
Despite its long coastline and strategic location on world trade routes, which gives it a natural advantage to control and direct shipments, India has not managed to get a dominant grip on shipping, even in its own continent. Critically examine why and suggest what India needs to do control and direct shipments in the region. (200 Words)
India’s 7,500-km coastline with 13 major ports and its strategic location on world trade routes gives it a natural advantage to control and direct shipments to boost the economy by means of trade. Yet, India has not managed to get a dominant grip on shipping, even in its own continent.
Reasons:
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- Failure to plan or execute projects, which resulted in non-utilization of 45 per cent of allocated funds.
- Fund allocation towards water transport is meager & port sector has less allocation in budgets.
- Naturally we have low draft ports, our dredging facility is not good nor we have capital.
- Our ports are running at high berth occupancy rates. so we cannot be a transit point.
- Indian shipping industry is subjected to some 12 types of taxes. This increases the cost.
- Large vessels cannot enter Indian ports. They dock at Sri Lanka and send cargo via smaller vessels.
- Ageing fleet. Needs to be modernized
- Main seafarer supplying countries: china, Philippines, turkey, Ukraine. India has not taken advantage of its demographic dividend to supply more officers in international maritime sector.
- Coastal shipping is not promoted well.
- High import duties on bunker oil & spares.
- Non availability of concessional finance for the acquisition of coastal vessels.
- Lack of separate berthing facilities at major port and inadequate cargo handling facilities at minor ports.
Suggestions:
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- Selection of minor ports is a step in right direction at present this demand is being met by rail and road transport system.
- Revival of project like Sagarmala to create a string of ports around India’s coastline to safeguard maritime interests
- Reduction in the turnaround time for ships by easing customs processes at major ports. As the turnaround time decreases, ports’ overall productivity will increase.
- MOU with other nations to build port in respective nations to secure the economic interest e.g. The Chabahar port there recently.
- Improvement in rail and road connectivity of ports, for speedy evacuation of cargo.