PM Modi stated that port cities and coastal states will emerge as vital growth hubs for a developed India

What constitutes the Port Economy?

The port economy pertains to the economic actions and worth created by the operation and advancement of ports, which act as crucial hubs in international trade and logistics systems.

Ports aid in the transportation of commodities and individuals, enable trading activities, and assist in ship construction and maintenance.

Historical Overview of India's Maritime Economy

In ancient India, harbors such as Lothal (Gujarat), Muziris (Kerala), and Arikamedu (Tamil Nadu) functioned as lively hubs of Indo-Roman, Indo-Greek, and Southeast Asian commerce.

In the medieval era, ports such as Surat, Calicut, and Masulipatnam became vital centers for commerce with Arabs, Persians, Chinese, and Europeans. Yet, with the emergence of colonialism, the emphasis shifted to resource extraction instead of national progress.

Condition of port development in India

India possesses an extensive coastline featuring 13 major ports and more than 200 non-major ports. Collectively, they manage approximately 95% of India’s foreign trade in volume and 70% in value. By 2024–25, India will be listed among the top 20 nations in shipbuilding worldwide.

Two Indian ports, Jawaharlal Nehru Port Authority (JNPA) and Mundra Port, rank among the world's top 30.

According to the World Bank’s Logistics Performance Index (LPI), in 2023 India climbed to the 22nd position in the Global Ranking for International Shipments and attained an overall 38th rank in the Logistics Performance Index score.

The Vizhinjam Seaport is India's inaugural dedicated transshipment port, designed to lessen reliance on overseas ports, as 75% of India's transshipment takes place internationally at present. A shipbuilding and repair hub is being established in Kochi as part of the Sagarmala initiative.

Advantages of a Strong Port Economy

Geostrategic Importance: Ports boost India's naval presence and facilitate programs such as SAGAR (Security and Growth for All in the Region) and Project Mausam.

Regional Development: Industrial zones centered around ports stimulate infrastructure expansion and draw private investment to inland areas.

Environmental Efficiency: Effectively managed ports lower carbon emissions by enhancing turnaround times and promoting a shift to railways/inland waterways.

Turnaround time refers to the duration a vessel remains at port from the moment it arrives until it departs. Inland Water Transport (IWT) produces 50% fewer CO₂ emissions per tonne-km compared to road transport.

Job Creation: Ports directly and indirectly facilitate millions of employment opportunities in logistics, storage, and related industries.

Government Programs

Sagarmala Initiative: Its goal is to lower logistics expenses through port modernization, industrialization driven by ports, and enhanced connectivity to the hinterland.

The Maritime India Vision 2030 seeks to improve India's maritime abilities with an investment of ₹3 lakh crore, intending to increase cargo handling capacity to more than 2,500 million metric tonnes.

The National Logistics Portal (Marine) is being created as a comprehensive digital platform that integrates all maritime stakeholders to provide more efficient and faster services.

Creation of the ₹25,000 crore Maritime Development Fund (MDF): This fund is designed to facilitate long-term investments in the industry, with the government providing 49% and the other 51% sourced from ports and private sector contributions.

The PM Gati Shakti Plan combines infrastructure planning across various sectors to enhance the efficiency of multi-modal logistics.

Path Forward

Cultivate Eco-Friendly Ports: Allocate resources for shore power, LNG fueling, and eco-conscious dredging to reduce environmental effects.

Involvement of the Private Sector: Partnerships between public and private entities (PPP) can accelerate infrastructure improvements and enhance service quality.

Utilize Strategic Geography: India needs to capitalize on its proximity to significant international trade routes to establish itself as a worldwide transshipment and logistics center.