The Indian maritime logistics industry is set to grow fast in the coming years. As India is racking up investments in manufacturing and giving a facelift to its port infrastructure, the maritime industry will thrive. This will also create tremendous opportunities in the shipping & port industry as well as other allied verticals such as logistic trains, warehouses, cold storage, containerized shipping, freight forwarding agents, etc. Likewise, new opportunities will unfold in related businesses such as hotels, sea-facing real estate, SEZs, shipping yards, truck & railway yards, container rental companies, etc.
India is set to play a pivotal role in global trade and eyeing an export of USD 1 trillion by 2030. It is also building multi-sector expertise in a host of sectors such as automobiles, smartphones & electronic appliances, pharma, food processing, chemicals, textiles, defense, etc. Multiple attractive Production Linked Incentives (PLI) have been introduced to boost indigenous manufacturing. In India’s endeavor to become a major powerhouse in the global supply chain, a well-developed maritime sector will play an instrumental role.
Giving Facelift to Port & Shipping Infrastructure
India has 13 major ports and 200+ minor ports, spread across an extensive coastline of 7500 km. The major ports are managed by the central government, while state government and private entities manage minor ports.
Ports play an important role in the EXIM trade in India. As per government statistics, in FY 23 the total export from India has risen to USD 447.5 billion from 422 billion a year before. Likewise, import has risen to USD 714 billion from USD 613 billion a year before. Major export items from India include rice & grains, vegetables, fruits, metals, petrochemicals, smartphones, textiles, generic pharma, etc. Likewise, the import items include crude oil, edible oil, metal, jewelry, bio-similar, machinery, etc.
In FY 23, major ports in India managed a total of 795 million tons of cargo, yearly growing by 10% as per the data revealed by GOI.
India is strategically investing in ports to reduce ATT (Average Turnaround Time) and improve overall port efficiencies. The port efficiency is currently in tune to 75%, steadily growing from 67% over the past 5 years.
GOI is taking strong initiatives towards the overall logistics industry. It aims to reduce the overall percentage of logistics in GDP to 8-9% from currently, 12-14%. The sustained focus will be directed towards the ports and maritime industry in India.
In 2017, the Sagarmala plan has been proposed under which USD 123 billion will be invested in ports, acquisition of shipping vessels, and improving last mile connectivity to ports. In 2021, a Maritime Vision 2030 has been unveiled under which USD 13.5-17.5 billion will be invested by 2030 to modernize ports in India.
100% FDI is allowed in the maritime sector. There are lucrative tax breaks for companies involved in the maritime sector, which will further attract private-sector participation.
Develop Inland Waterway Sector
India has plenty of water resources including rivers, canals, backwaters, creeks, etc. There is plenty of potential to develop inland waterways, especially in North East India, West Bengal, Goa, Kerala, and Maharashtra. India has a total inland waterway length of 34,200 km, out of which 45% is navigable.
In 2022, the inland waterways managed a total of 10.9 million tons of cargo, growing steadily from 2017, when it managed a total of 4.5 million tons. However, it is less than 1% of the overall cargo managed in the country. In contrast in developed markets such as the USA, China, and EU, inland waterways manage 7-8% of the overall logistics.
Inland waterways in India can be highly effective in the transport of bulk cargo such as cement, wood, coal, iron ore, etc. However, to utilize the inland waterways in the country, it is also essential to invest in mechanization & automation, develop storage house infrastructure, and skill enhancement.
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