Will India Manage To Boost Port Infrastructure To Reclaim Lost Ground In The Indian Ocean?

However, New Delhi is now making an all out attempt to play catch-up with other economies including China which has increased its presence in the IOR.

Several countries including the US, Japan, and those in West Asia and Eurozone are keeping a close watch on India's port-led developments as it tries to match Chinese and South East Asian ports which account for far more traffic than India's ports. 

Official data shows that the annual cargo handling capacity at major Indian ports increased by 87 per cent between 2014-15 to 2023-24. The total cargo handled rose from 871.52 million tonnes to 1629.86 million tonnes, during this period.    

Earlier this week, Sarbananda Sonowal, Minister of Ports, Shipping and Waterways said that India is looking to develop two ports—one in Bangladesh and the other in Sri Lanka - besides working to expand throuput at its own ports. 

Despite the fact that in recent times India-Bangladesh bilateral relations have hit a rough patch, New Delhi may initiate fresh talks with the interim Muhammad Yunus government in Dhaka over operational rights of a terminal at Mongla port, one of the largest ports in Bangladesh.

In Sri Lanka, India did not repeat the mistake made in Bangladesh. New Delhi invited Anura Kumara Dissanayake, now elected President of Sri Lanka, earlier this year.

This reaching-out exercise worked well for India, as Dissanayake, after being hosted by India, said that Sri Lanka and India have long-standing bilateral and diplomatic relations and his party -Janatha Vimukthi Peramuna - intends to strengthen those ties.

India's focus in Sri Lanka is on the development projects at Kankesanturai port near Jaffna.

India's Other Maritime Infra Endeavours

India is also managing and operating the Sittwe port in Myanmar and Chabahar in Iran, though both have their own problems.

In May, India and Iran signed a 10-year contract for the operation of Chabahar port after years of delay.

India, with an investment of about US$ 120 million has operate the Shahid Beheshti Port in Chabahar while also improving its infrastructure. Considered a game-changer for India, the port will give New Delhi access to Afghanistan and several countries in Central Asia and Europe. It will also ease the global supply chain while reducing time and transit costs.

“This government’s commitment to strengthening maritime infrastructure is paving the way for unprecedented economic growth and generating significant employment opportunities across the country. Waterways are becoming the new highways of India,” Sonowal said recently.

With India's thrust on developing ports outside its borders, the role of India Ports Global Ltd (IPGL), formed in 2015 will expand. It is already planning to increase its workforce. 

Peter S. Goodman and Hari Kumar, in a recent article, said that New Delhi is now pursuing an aggressive campaign to catch up, readying plans for new ports while expanding existing docks.

“Whether those designs come to fruition and how quickly these materialise will shape the results of one of India’s grandest aspirations: swelling into a full-fledged manufacturing and export colossus,” they said.

Besides about 80 per cent of its crude oil requirement, more than 90 per cent of India’s trade is transported through the maritime routes. For India, the expansion of maritime influence is not just about economic dynamics but also about geopolitical play.

However, bilateral and other international projects often take time to fructify. India and Iran took years to resolve issues around the Chabahar port project. Similarly, the regime change in Bangladesh is posing fresh problems for India, as is a rebellion in Myanmar.    

Growth In Domestic Port Infra Slow

For the 12 major Indian ports, cargo throughput has been slowly increasing. According to data, in 2013-14, the total container traffic in India was around 7.4 million twenty-foot equivalent units (TEUs),  a measurement indicting capacity of cargo ships and container ports. It increased to about 11.4 million TEUs in FY 2024.

“There has been an increase in cargo throughput in the ports in the last few years. While investments in port infrastructure have increased, the rise in cargo throughput could be because of a rise in imports. We need to enhance exports as well,” Afaq Hussain, Director and Founding Member of the Bureau of Research on Industry and Economic Fundamentals (BRIEF), told The Secretariat.  

Shipment of bulk liquid dominated the cargo profile of the ports. Cargo throughput is an important indicator of port efficiency and level of economic activities.

The rise in throughput is also due to the average turnaround time at major ports coming down from 127 hours in 2010-11 to 53 hours as of 2021-22. For India, aiming to become the manufacturing hub for the world, port infrastruture will be critical.   

Last year, Prime Minister Narendra Modi announced an investment plan of Rs 23,000 crore for development and improvement of India’s ports while reducing shipping emissions.

“In the post-Covid era, the world needs reliable and resilient supply chains,” Modi said during his address at the Global Maritime India Summit (GMIS) in Mumbai.

With a 7,517 km-long coastline and 14,500 km of potentially navigable inland waterways, India occupies a strategic location on major international trade routes, a 2019 KPMG report noted.

The Narendra Modi government’s Sagarmala Programme launched in 2015 is aimed at fostering an integrated port-centric logistics network in the country. 

However, with fluid political situations in immediate neighbourhoods in South Asia, challenges faced by India in its quest to become a dominant Indian Ocean Rim player, in terms of maritime trade and port infrastructure, will remain daunting for quite some time in future.