Overall cargo traffic at India’s ports is currently on pace to reach 1,758 million metric tons (MMT) in 2017, a massive 67 percent increase from 1,052 MMT in 2015.
While the Indian shipping industry burgeoned under the rule of the British East India Company and British Empire, post-Independence has brought exponential growth to many aspects the Republic’s economy.
According to the International Monetary Fund’s April 2017 World Economic Outlook database update, India is the seventh largest economy in the world by nominal GDP and the third largest in terms of purchasing power parity.
With a coastline of about 7,517 kilometers, India is also considered the 16th largest maritime country in the world. And with around 95 percent of India’s trading by volume coming via maritime transport, the nation’s shipping industry has continually registered positive growth statistics, regardless of international trends and downturns.
Growth Snapshot. According to the India Brand Equity Foundation, India has 12 major and 200 notified minor and intermediate ports. Cargo traffic, which reached 1,052 million metric tons (MMT) in 2015, is expected to grow to 1,758 MMT by 2017 and these shipping stats from June 2017 support the prediction.
Cargo traffic at major ports stood at 606.37 MMT in FY 16 and has increased at a Compound Annual Growth Rate (CAGR) of 7.4% during FY07-17.
During April to September 2016, 12 major ports in India handled 315.4 MT (Million Tonnes) of cargo, showing a growth of 5.1 per cent in comparison to the same time during previous year.
Cargo traffic at non-major ports Stood at 466.1 MMT in FY16 and traffic has expanded at a CAGR of 10.7 per cent during FY07–16 and is expected to grow annually at 15.9 per cent during FY07-17.
Cargo traffic at non-major ports are evolving faster than major ports with the contribution of non-major port’s traffic to total traffic rising to 43.5% in FY16 from 28.6% in FY07.
Infrastructure Investment. The Indian government has continually improved their maritime operational efficiency through mechanization, draft deepening and speedy evacuations.
The Indian Minister for Shipping recently announced a massive investment in India’s ports and roads sector, which is likely to help boost the country’s economy. The government plans to develop 14 coastal economic regions as part of the country’s Sagarmala (string of ports) project.
The development of these coastal regions is expected to increase India’s merchandise exports by $110 billion and increase their industrial competitiveness. The government is also looking to develop inland waterway sectors as an alternative to road and rail routes, transporting goods to the nation’s ports and attracting more private investment in the region.
Meanwhile, India’s economic growth and investment in logistics infrastructure is attracting new services from major global container carriers. In June, JOC.com reported that Hyundai Merchant Marine (HMM), CMA CGM, Shipping Corp. of India, Korea Marine Transport Co., and Pendulum Express Lines will launch a joint loop between Asia and India dubbed the China West India Express (CWI) service. The new loop will use six 4,600-TEU vessels with a full port rotation of Xingang, Qingdao, Ningbo, Singapore, Port Klang, Nhava Sheva, Mundra, Hazira, Colombo, Port Klang, Singapore and back to Xingang.
Wary of China’s One Belt One Road Initiative, India is focusing on building up its own resources to increase regional and international attractiveness and reliability as a major economic player – and it seems to be paying off. According to third-party logistics provider Agility’s 2017 Emerging Markets Logistics Index, more than 800 representative of logistics corporations around the globe classified India as the most attractive market with the greatest opportunities for growth.
In the overall ranking of the Emerging Markets Index, India moved up one spot to second place, with China securing the number one slot. If these growth predictions are correct, India could become a major hotspot for infrastructure investment and an engine for continued economic growth in the region.
Cardenas is an accomplished logistics management professional with nearly thirty years of experience in domestic and international supply chains. He currently serves as president of supply chain solutions provider TOC Logistics International.