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Maritime Competence and Transhipment through Port Development

Updated: Mar 25, 2022

Indian coasts have a long history of bringing foreign influence through commerce and connectivity within the country. In ancient times, the Malabar confluence through the port of Calicut was a transit point for foreign travelers. As mentioned in an article in the Indian Naval Despatch, Winter 2020, Cmde (Dr) Johnson Odakkal notes how the Malabar coast was dotted with ports that carried on a thriving commerce in the markets of the Indian Ocean Region. The coast was known as a melting pot of communities, religions & languages. It evolved into a confluence of maritime trade routes heading westwards or eastwards. Today, India has 12 major ports and several new and emerging ports. India’s geography owing to the eastern & western has availed the opportunity to have multiple ports which could aid in multiple sectors within the maritime industry. Through this article we would be looking at two south Indian ports, Kochi & Thoothukudi that can be better utilised to build a robust maritime sector.

The Indian maritime industry has been through vast changes from Indian independence. A lot of the maritime prowess that India possessed during the ancient and mediaeval was lost due to the colonial period and lack of development in terms of global standards. Few ports although did receive the infrastructural developments from the colonial masters, yet to even be considered a competition to leading maritime countries, that wasn’t enough. Today, achieving the goal of a maritime nation is more than just a show of strength; it leads to the socio-economic development of the country. The Sagarmala project initiative launched in 2016, hosted a maritime India summit in which Prime Minister Narendra Modi invited the global business community to become a partner in the process of India’s port-led development. From 2014, the Indian government has emphasised on building the futuristic infrastructure in the country through the Sagarmala programme. Along with the Make in India initiative, the government aims to modernise the ports and to integrate them with special economic zones (SEZs), port-based smart cities, industrial parks, warehouses, logistics parks and transport corridors. Opening an avenue for global investors in terms of enormous opportunities through this massive infrastructure transformation programme.

In March 2021, the government had released a document on Maritime India Vision 2030 which encapsulates opportunities of growth in maritime industry. The Maritime India Vision 2030, states the total traffic handled at Indian Ports rose from 885 MTPA (million tones per annum) in 2010-11 to 1300 MTPA (million tones per annum) in 2019–20. The 12 Major Indian Ports handled nearly 54 percent of the total cargo in 2019-20 and have witnessed just about 4% CAGR growth in overall cargo traffic over the last 5 years. Given the evolving global shipping market and 10-year traffic projections across commodities and regional clusters, India needs to upgrade its port infrastructure to increase its market share. Through the Maritime India Vision 2030, the government has identified key interventions across 4 areas which are brownfield capacity augmentation, developing world-class Mega Ports, development of transshipment hubs in Southern India, and infrastructure modernization. With the target to achieve 3 ports by 2030, MIV 2030 envisions an overall investment of INR 3,00,000 – 3,50,000 Cr across ports, shipping, and inland waterways categories. This vision roadmap is estimated to help unlock INR 20,000+ Cr worth of potential annual revenue for Indian Ports. Further, it is expected to create an additional ~20,00,000+ jobs (direct and non-direct) in the Indian maritime sector.

The development of transshipment hubs is vital for India as it would be a gateway into building southern India’s economy through the maritime industry. It would handle containers, store them temporarily and transfer them to other ships for the onward destination. The task owing to the location and proximity of international ports from South of India, makes it an ideal point to emerge as a leader in the industry. Major transshipment ports today on the Indian Ocean route lie on, Dubai, Colombo & Singapore. With each country charging a fee per container according to the competitiveness of the port. India could leverage its location and break its own container cost as well as gain fees from foreign containers. In the conversation around Port led development the prominence in the narrative is on a few major ports such as JNPT. The larger need requires emphasis and is shared in this piece through developments at Thoothukudi and Kochi.

As part of the initiative the government has pushed for development of all major ports and has identified areas for new ports to be developed. To speak of the developments of the existing ports, the V.O. Chidambaranar (VOC) or Thoothukudi port, which was named after the Indian Freedom Fighter, V.O. Chidambaranar. In October 2020, the then Minister of State for Ports, Shipping & Waterways, Shri Mansukh Mandaviya, inaugurated the DPE (Direct Port Entry Facility) at V. O. Chidambaram Pillai Port Trust. The Direct Port Entry Facility will help in reducing the time and cost of exports. Exports will be allowed directly without any delay into the port terminal and finally, the list of compliances is verified to let the export orders and goods out of India.[1] In the past year, reports also mentioned about the port being developed into a major transshipment port, with a new multi-modal logistics park were announced. In August last year, port Chairman T K Ramachandran had said that the port would be transformed into a transshipment hub at an outlay of Rs 7,000 crore. While launching various infrastructural, social welfare projects in the state, Prime Minister Narendra Modi said about 575 projects, which include port modernization, port linked industrialization, coastal community development & port connectivity development which would involve an outlay of over Rs 6 lakh crore and would be implemented between 2015 and 2035. The move would create a domino effect in industries related to the maritime sector and also bolster the economy of the state. With the completion of the project an overall enhancement of the state workforce as well as the country's’ maritime force would be seen and thus, we have a transformed pearl city of Tamil Nadu.

Through the years, India has been working towards regaining the maritime might it once had. With the initiatives in the recent past within the maritime industry we see how the shift and developments are being looked at to project and enable India to lead as a maritime power. With growing Tier II cities on either side of the country it is vital to look at the trade routes through sea and inland connectivity that would bolster development.

On the western coast of India, in the state of Kerala, the government through Sagarmala has plans to build 63 Projects which would be worth more than Rs 17,000 Cr.. In order to enhance the infrastructure related to port-led industrialization, port modernization, port connectivity enhancement, coastal community development & coastal shipping, and inland waterways. The Queen of the Arabian Sea, Kochi has been a hub of connectivity, culture and commerce throughout history. The Kochi port is a major port which has capabilities to be a transshipment port in the west coast. The Vallarpadam port which was inaugurated in 2011, was the first of its kind in India to make India’s mark in the industry as well as create a milestone in logistic infrastructure development. The added advantage that Kochi has is of the area being developed as a smart city with facilities of IT Park & other transportation facilities. The effort to build the International Container Transshipment Terminal (ICTT) at Vallarpadam in Kochi, took 10 years to achieve the milestone after battling the initial turbulent period. The ICTT also managed to silence sceptics who did not give a chance to the terminal saying Colombo port’s locational advantage and the Vallarpadam’s smaller draft will not help it survive for long. Apart from booming local state economy it adds to the prowess of the southern region. This would ensure all round development within the country and would also be a chance for maritime might & connectivity through the south to regain impetus and as well as focus. It adds to a strong economic case which means enabling a transshipment hub in Southern India that can attract Indian and regional transshipment traffic from the current hubs, save significant revenue loss, reduce logistics inefficiencies for Indian trade which otherwise goes to Sri Lanka or Singapore, reduce risks to country’s export competitiveness and create an opportunity for India to become a large hub for Asia-Africa, Asia-US/Europe container traffic trade.

Enabling a socio-economic powerhouse through the maritime industry through the growth and development for the state as well as the country as a whole. Unlike the earlier standard of growth being centric to certain regions due to the prevailing colonial infrastructure, this would enable growth in a sector leading to the development of the country. Powerful industries enabling social and economic growth are essential. They are required to be spread out rather than concentrated near a particular region or area. Southern India has been known for years of connectivity and trade all due to their sea power. Maximizing it and multiplying the forces with abilities to make India be a superpower also lies perfectly within the region. Giving the hand ahead, ensuring that growth and development gets a bottom up approach that would propel a new era of maritime development for India. Through the ideas and developments mentioned above, one prominent call to action comes through, the need for a growth mindset. Channeling this mindset would ensure people in maritime industry, policymakers, young scholars and professionals and even other industries to become leaders and consequently serve the country.

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