The port economy is defined as the economic activities and values produced through the functioning and development of ports, which act as important nodes in global trade and logistics networks. Ports facilitate the movement of goods and people. They also ensure export-import operations and support shipbuilding and repair.
Status of Port Development in India
(a) India has a very long coastline with 13 major ports and over 200 non-major ports. Together, they carry around 96% of India’s export-import by volume and 71% by value.
(b) As of 2024–25, India ranks among the top 20 countries in global shipbuilding.
(c) Two Indian ports, Jawaharlal Nehru Port Authority (JNPA) and Mundra Port, are among the top 30 globally.
(d) The Vizhinjam Seaport is the country’s maiden dedicated trans-shipment port. It aims to decrease dependence on foreign ports, as 74% of India’s trans-shipment currently happens abroad.
Significance of Port Infrastructure:
(i) Important gateways for transboundary trade: Ensure the movement of goods across countries. India’s major and minor ports carry about 95% of India’s foreign trade.
(ii) Create numerous economic opportunities, generating employment and attracting investments. 100% FDI is permitted through the automatic route for projects related to their construction and maintenance.
(iii) Critical node in global supply chains: It connects various modes of transport systems. Also, enables the unrestricted flow of goods from production units to consumers.
(iv) Connectivity and Regional Integration: They enable trade, encourage cross-border liaison, and promote the development of economic zones and industrial clusters. Advanced ports increase a country’s competitiveness in international markets.
Challenges of Port Economy
(i) Challenges like technology and insufficient infrastructure exist in non-major ports, where there are sufficient berths or ones that are long enough for vessels to berth properly.
(ii) Port Congestion: The number of containers, the lack of equipment for managing them, and ineffective operations are major concerns. One can take the port of Nhava Sheva as an example.
(iii) Protracted Inspections and Scrutiny: Even after India’s digitalised customs processes, cargo and other maritime activities are nevertheless the subject of protracted inspections and scrutiny.
(iv) Management Issues: Not similar administrations are in charge of major and minor ports. Their regulatory framework is also rigid.
(v) Dredging: A few ports, on the eastern coast and the Gulf of Mannar, are vulnerable to excessive siltation, as a result, their capacity gets reduced.
Government Initiatives
(i) Harit Sagar Green Port guidelines: Safe, efficient, and sustainable ports while implementing sound environmental practices among all stakeholders.
(ii) Sagar Setu App: It facilitates seamless movement of goods and services in ports while substantially enhancing the ease of doing business.
(iii) Major Port Authorities Act, 2021, grants greater autonomy to major ports.
(iv) Marine Aids to Navigation Act 2021: provides for increased safety and efficiency in vessel traffic services and training and certification at par with international standards.
(v) Indian Vessels Act 2021: which brings uniformity in law and standardised provisions across all inland waterways in the country.
(vi) Maritime India Vision 2030: Accelerate the growth of India’s maritime sector by developing world-class Mega Ports, transhipment hubs, and infrastructure modernisation of ports.
(vii) Sagarmala Project: To promote port-led development in the country through harnessing India’s long coastline, potentially navigable waterways, and strategic location. The main vision is to reduce logistics costs.
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Way Forward
(i) Promoting Private Sector Participation: Increased participation of the private sector has increased the number of minor ports. So, favourable policy changes, required for the Indian Ports Act with modern-day demands.
(ii) Infrastructure Development: Upgradation by increasing the capacity of ports, ameliorating berthing facilities, and upgrading storage and handling capabilities. Leverage automated cranes, robotic systems, and smart port management systems to make operations more efficient.
(iii) Improve Port Connectivity: Ameliorate connectivity between ports and the hinterland with the help of efficient networks of road and rail.
(iv) Establishing Coastal Economic Zones (CEZs): Provide a favourable business ecosystem, efficient regulatory processes, and infrastructure support, which can attract manufacturing units, logistics co. , and other industries to set up operations near ports.
(v) Digitisation of Port Operations: Technologies like blockchain, Internet of Things (IoT), as well as data analytics, can ensure transparency, efficiency, and security. Automation of processes, like electronic documentation, container tracking, as well as cargo clearance, can help decrease paperwork, delays, and human errors.
(vi) Reducing Regulatory Burden: Simplifying as well as streamlining regulatory processes, permits, and clearances related to port infrastructure, development, is a prerequisite. As it can attract investments and expedite project implementation. An efficient regulatory framework can ensure trust among investors and consequently promote ease of doing business in the segment.
Conclusion
The port economy reaches its full potential when infrastructure and the ease of doing business are promoted together. Through public-private partnerships (PPPs) over the past 10 years, the government has undertaken several efforts. It includes policy reforms and the introduction of new technologies to upgrade India’s ports to global standards.