National Investment and Infrastructure Fund

Ports

India's long coastline of 7,517 km and inland waterways of 14,500 km offer immense potential for development. The country has 12 major ports, 69 non-major operational ports which are operational. The aggregate handling capacity of Indian ports put together is around 1.5 bn tons per annum. In 2014-15, actual traffic volume of 1.0 bn tons was achieved by the Indian ports, which is projected to grow to 2.5 bn tons per annum by 2024-25 (CAGR 9%). Historically, the traffic CAGR over the period 2005-2015 has been 7%. Sea borne trade in India is growing at twice the global growth rate. Containers trade is growing at 6.5% per annum, faster than the global average of 5.4% over the past 10 years. Integrated development of ports is being carried out under Government of India's Sagarmala program. Under this program, 150+ projects have been identified having USD 50 bn investment potential. 6 new mega ports, development of new industrial clusters, etc. is being carried out under the Sagarmala program.

Highlights of the specific government plans under the Sagarmala program include:

Port mechanization and modernization

• Potential to improve aggregate port capacity in India by 100 MTPA through port mechanization/ modernization

• Three port modernization themes have been identified under Sagarmala for existing ports, viz.

– Mechanization: New higher capacity equipment to replace old ones

– Draft enhancement (dredging): Increase existing drafts to handle supermax vessels

– New terminal development

New port development

• Quite a few existing major ports operate at more than 100% capacity utilization

– New ports to be built in vicinity

• Other new ports to be constructed for optimizing cargo movement

• Trans-shipment hubs planned at southern tip of India (TN, Kerala) to facilitate global East-West trade

Hinterland connectivity and multi-modal logistics

• Hinterland connectivity projects have been identified

– Road, rail connectivity to be provided or enhanced

• Multi-modal logistics hubs proposed

– 7 hubs proposed in Chhattisgarh, Karnataka, Odisha, Rajasthan, UP, Uttarakhand, West Bengal

Other initiatives taken by the Government to provide an impetus for ports sector growth have been outlined below

Ease of doing Business

• FDI up to 100% under automatic route for part development projects.

• One time trading license for vessels in lieu of annual renewal.

• Web based Port Community System to promote online port business.

• Standardized bidding documents for PPP projects & transparent bidding process.

Incentive for Investment

• Reduced Service Tax incidence on coastal shipping.

• Viability Gap Funding for PPP projects.

• Infrastructure status and fiscal incentives for shipbuilding and ship repair.

• Income tax exemption for infrastructure development including in parts.

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