Industry Research Update

India Ports Industry Update

Introduction
Having a coastline of more than 7, 517 km of length, Indian port sector encompasses
of over 200 ports. Indian territorial waters give way to most of the cargo ships that
sail between East Asia and America, Europe and Africa.
There are 13 major and about 200 non-major ports in the country. A rising need for
robust port infrastructure, strong growth potential, favourable investment climate,
and sops provided by State Governments provide private players immense
opportunities to venture into the sector.

Key Statistics

Indias 12 big ports, which account for about 58 per cent of the total cargo
shipped through the countrys ports, handled 277 million tonnes (MT) of
cargo in the April-September period of 2013, marking an increase of 2.3 per
cent over the corresponding period last year

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Recent Developments

Paradip Port Trust (PPT) is planning to give an impetus to its cargo handling
facilities as the traffic has increased through its route. The authorities have
decided to establish 'containerised cargo handling' infrastructure to support
the rising exports. So far the Container Corporation of India and
Warehousing Corporation of India have shown interest in the project,
according to official statements. If things fall in place inland container depot
would come up to handle seafood in refrigerated containers during the first
phase of the revamp

Adani Ports and Special Economic Zone Ltd (APSEZ) are finally buying
Dhamra port, a venture of Larsen and Toubro Ltd and Tata Steel Ltd, in
Odisha. APSEZ agreed to buy Dhamra Port Co. Ltd (DPCL) in early 2013 for
about Rs.5, 000 crore (US$ 813.21 million), provided that the current
operator gets environmental and coastal zone approvals. If the deal gets
sealed, it will be the largest in Indias ports sector, after Pipavav port in
Gujarat was acquired by APM Terminals Management BV in 2005 from
Indias SKIL Infrastructure Ltd. The new proposition will help APSEZ boost
its handling capacity to over 200 MT by 2020

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The Indian unit of Japanese auto maker Nissan Motor Co Ltd - Nissan Motor
India - has inked an agreement with Ennore Port Ltd (EPL), according to
which it will export at least 60, 000 cars every year. The agreement, inked in
the presence of Union Shipping Minister G K Vasan, stands valid for the next
10 years. According to the agreement, Nissan will get discounts and
concessions in the wharf age for up to 60,000 cars a year at the rate of 0.36
per cent for every unit. Its cars will be given free parking space for the first
15 days and will be handled as priority units at the port

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Government Initiatives

The Government of India (GOI) has initiated National Maritime Development

Programme (NMDP), an initiative to develop the maritime sector for which
the administration has projected an outlay of US$ 11.8 billion. The
Government has also allowed foreign direct investment (FDI) of up to 100
per cent under the automatic route for projects related to the construction
and maintenance of ports and harbours and a 10-year tax holiday for
enterprises engaged in ports.

Meanwhile, Belgium has assured the Indian President Pranab Mukherjee,

that the country would consider his suggestion for help in developing a new
port near Kolkata as the two countries exchanged views in new areas like
port management. The two sides identified new areas of cooperation
including collaboration in ports wherein Belgium's expertise in managing
riverine ports would come instrumental.
Kolkata Port is India's only major riverine port having two dock systems at
Kolkata and Haldia. Both systems currently handle around 55 MT of cargo.
Kolkata Port Trust intends to develop port facilities at Sagar Island as well i
order to attract more ships and to expand business considering an expected

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increase in industrial activity that would eventually generate around 60 MT

of additional traffic by 2021-22.

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Future Outlook
Cargo traffic at major ports in India is expected to increase by 4 per cent in 2013-14,
according to a latest report released by the Centre for Monitoring Indian Economy
(CMIE). Cargo volume is likely to swell up to 567 MT from 545 MT in the preceding
financial year. This growth would substantially be supported by a healthy rise in
freight volume of POL (4.1 per cent) and coal (21.9 per cent).
Other industry estimates reveal that the total cargo traffic in India stood at 911.5
million metric tonnes (MMT) during FY12 and is expected to touch 1, 758 MMT by
FY17. Port traffic at major and non-major ports in India is poised to rise at a
compound annual growth rate (CAGR) of 22 per cent and 5.5 per cent respectively
over FY12-14. Also, By FY17, cargo capacity in India is expected to increase to
2301.6 MT from 1247.5 MT in FY12.

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