The Indian ports and shipping sector has witnessed significant transformation and growth over the years. Initiatives such as the integration of technology into port operations, capacity enhancement and sustainability measures have played a key role in shaping the sector. Further, continued support for public-private partnership (PPP) models has driven positive changes in the sector. In an interview with Indian Infrastructure, Sarbananda Sonowal, Union Minister of Ports, Shipping and Waterways (MoPSW), discusses the sector’s progress, key trends and challenges, and the future outlook. Edited excerpts…

How has the ports and shipping sector evolved over the years? What have been some of the key milestones during the past year?

The ports and shipping sector in India has achieved significant milestones in the past year. In 2023-24, coastal cargo movement reached 162 million metric tonnes per annum (mmtpa), reflecting a 7 per cent increase from 2022-23. This marks a 112 per cent rise since 2014-15, highlighting the substantial growth in coastal cargo movement. Over the years, there has been continuous improvement in cargo handling capabilities at major ports in India. The major ports recorded a cargo throughput of 820 mmtpa in 2023-24, marking a 3 per cent year-on-year increase.

There has also been a steady expansion in the fleet size. The number of Indian flagged ships and vessels reached 1,526 in 2023-24. Further, in 2023-24, India built ships with a gross tonnage of 26,412. This increase in gross tonnage underscores the growth in domestic shipbuilding capacity and India’s advancing shipbuilding industry and its contribution to the national fleet.

In recent times, there has been a significant push towards integrating technology into port operations, including the use of data analytics, artificial intelligence and smart port solutions to enhance efficiency and reduce logistics costs. The MoPSW is committed to creating sustainable, world-class maritime and inland waterways infrastructure to provide efficient and cost-effective logistics, and promote exim trade.

To this end, the ministry has taken several initiatives and achieved many milestones. Since the award of the first PPP port project almost 26 years ago, the government has advocated for PPP models to attract private investment in port development and operations. Further, the introduction of digital initiatives has helped improve overall efficiency in the sector. These include the launch of the Sagar-Setu app and the National Logistics Portal-Marine (NLP-Marine), which have brought all stakeholders on to a single platform.

What steps are being taken to enhance port capacities?

The MoPSW has been taking several steps to enhance capacities at its ports, focusing on infrastructure development, technological integration and policy reforms. Initiatives such as the construction of new berths and terminals, along with the mechanisation of existing ones, are under way to increase the cargo handling capacity. Further, deepening draught in port channels through capital dredging will help larger vessels to dock, enhancing the ports’ capacity to handle more and bigger ships.

The development of Vadhavan port, with a budget of Rs 762 billion, marks a significant milestone. With a natural depth of 20 metres, the port is expected to handle 28.3 million twenty-foot equivalent units (TEUs) of container traffic by 2040. This expansion will increase India’s port capacity to 298 mmtpa.

The upcoming Great Nicobar Island port at Galathea Bay will be another major achievement. It will be developed in four phases with a total estimated cost of Rs 437.96 billion. The port aims to handle 4 million TEUs by 2028 and 16 million TEUs by 2058. It will be developed on a PPP model.

What has been the progress so far under the Sagarmala programme? What are the targets and timelines?

The Sagarmala programme is a transformative initiative aimed at leveraging India’s coastline, navigable waterways and strategic location to reduce logistics costs and promote port-led development. The vision is to decrease the cost of transporting domestic and exim cargo by enhancing port infrastructure, improving connectivity and fostering coastal community development. The programme has over 839 projects valued at Rs 5.79 trillion, with 262 already completed. Connectivity improvement is crucial. Around 91 road and rail projects adding 8,337 km of connectivity to ports have been completed. Another key priority is coastal community development. Projects such as the National Maritime Heritage Complex at Lothal will highlight India’s rich maritime history.

What has been the government’s experience with PPP in the port sector? What is the future potential?

In 2023-24, PPP projects worth Rs 90.8 billion were sanctioned, an increase of 9 per cent over the previous year. The steady growth in the value of PPP projects reflects continued confidence and interest from private investors as well as the government’s push for PPPs. The Maritime India Vision 2030 aims for PPP players to handle 85 per cent of the cargo, up from the current 56.5 per cent. To achieve this, the ministry has already identified 81 PPP projects with a total value of Rs 424 billion from 2021-22 to 2024-25. Of these, 19 projects worth around Rs 112.29 billion have already been awarded.

What steps are being taken to make Indian port infrastructure smart and green?

The MoPSW’s commitment to sustainability is in line with the Make in India initiative. Harit Sagar (Ports) aims to position major ports as hubs of economic growth, reduce carbon intensity, develop an environment-friendly ecosystem and promote stakeholder participation. The Green Tug Transition Programme aims to operationalise all tugs at major ports with green hybrid propulsion systems by 2025 and convert 50 per cent of all tugs into green tugs by 2030. In addition, NTPC Green Energy Limited is partnering with the port authority to achieve a renewable energy capacity of 60 GW by 2032. Further, Tuticorin Port has been designated as the country’s first green hydrogen hub, with 500 acres of land earmarked for this initiative.

What has been the progress in the dredging sector? What are some of the key recent initiatives?

Over time, the dredging capacity at major ports has improved, with many ports achieving a draught of at least 14 metres. The goal is to increase this to 17 metres in order to handle larger container ships. The sector has incorporated new designs, technologies and equipment to enhance efficiency and productivity. Smart technology solutions are being deployed to improve operational efficiency. The government has proposed to undertake maintenance and channel deepening works at key ports on PPP basis, aiming to bring in more efficiency and investment.

Currently, the Dredging Corporation of India (DCI) is in the process of procuring a trailing suction hopper dredger of 12,000 cubic metre capacity, which is being built at the Cochin Shipyard under the Atmanirbhar Bharat program. The steel cutting has been completed, and the fabrication of blocks is in progress. In 2023-24, DCI signed various MoUs with its clients, suppliers, technology partners, etc.

What are the key challenges that the sector is facing? What will be ministry’s priorities in next two to three years?

Challenges include high turnaround times and congestion due to inadequate handling equipment. Further, limited dredging capacity, inefficient hinterland connectivity and delays in obtaining approvals can slow down port development projects.

The MoPSW’s priorities in the next two to three years include increasing ferry and cruise passenger movement, deploying digitalisation, improving the shipbuilding and ship recycling ranking, implementing the Hong Kong International Convention for Safe and Environmentally Sound Recycling of Ships, developing the National Maritime Heritage Complex, increasing the cargo handled through PPP, creating green hydrogen hub ports and promoting green inland vessels.

What is the outlook for the sector? How do you see the Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047 transforming the country’s port sector?

The maritime sector is poised for significant growth and modernisation, supported by strategic government initiatives, technological advancements and increasing global trade activities. The Maritime India Vision (MIV) 2030 is a blueprint for the coordinated growth of India’s maritime sector. The initiatives under it are focused on improving port efficiency, capacity augmentation and port-driven industrialisation; and creating safe, sustainable ports. MIV 2030 aims to increase the share of inland waterway freight movement and passenger traffic, contributing to multi modality in the transport sector.

Under the Maritime Amrit Kaal Vision 2047, the MoPSW aspires to move India from 18th to 5th position in global ship tonnage by 2047, boosting seafarer jobs. It also aims to move India from the 22nd rank to the top five in shipbuilding by 2047, attracting foreign investments and creating manufacturing jobs. The Maritime Development Fund, worth Rs 250 billion, aims to provide low-cost, long-term financing to the sector. This fund seeks to address the decline in the share of overseas cargo carried by Indian flagged vessels, and mitigate the risks associated with reliance on foreign fleets. It is expected to support special purpose vehicles for procuring and operating around 1,000 Indian-built ships. This will have a multiplier effect on allied and ancillary industries.

Shipping reforms are expected to transform the entire ecosystem, increasing ship acquisition, Indian ownership, job creation, supply chain resilience and forex GDP growth. Initiatives such as the Maritime Development Fund, the Harit Nauka guidelines and the Ship Building Financial Assistance Policy aim to enhance India’s tonnage and shipbuilding sectors.