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Ports - Anchoring a Growth

India occupies a strategic location on the global maritime map. Along its extensive coastline of 7,517 km, there are 12 major ports. Eleven major ports are Port Trusts, governed by the provisions of Major Port Trust Act, 1963 and the twelfth, Ennore Port, is the first major corporate port. In addition, there are 185 minor and intermediate ports spread across the nine costal states. These are controlled by the respective states.

Indian ports handle 90 per cent of India’s total foreign trade in terms of volume and 70 per cent in terms of value.

Ports sector set to attract US$ 5.5 billion in the next five years

The Government of India (GOI) is using privatisation as a tool to expand existing port infrastructure (augmenting the existing capacities as well as developing greenfield ports). With the law relating to privatisation already in place, the ports sector is emerging as one of the most attractive opportunities for private sector investments.

Rampant growth in traffic – driving demand for additional capacity

The traffic handled at the ports has been growing steadily over the past decade. Following the liberalizations and opening of the Indian economy in the early 1990s, there has been a significant increase in India’s maritime trade, with traffic increasing from 165 MTPA in 1991 to over 500 MTPA in 2004-05.

The Government has fixed an ambitious target of US$ 150 billion for exports by the year 2008-09 to double India’s share in world exports from nearly 0.8 to 1.5 per cent. Further, the Ministry of Shipping projects the port traffic to grow to a level of 650 MTPA by 2008. As a result, the Indian ports require capacity expansion on a large scale. As opposed to the growth of 3.5-4 per cent in global trade, India has been registering a 10.4 per cent growth in containerised cargo and a 6 per cent growth in bulk cargo. India’s 3.9 million TEUs (Twenty-foot Equivalent Units) in 2004-2005 is expected to grow to 4.4 million TEUs in 2005-06 accounting for 5-6 per cent of cargo in Asia.

In the past five years, manufacturing exports from India have increased at a compounded annual growth rate of 14 per cent. Ores and minerals exports have increased 4.5 times in last 5 years.