India aims to pour US$60 billion into ports by 2020 under a drive to spur the fastest growth in more than two decades and ease bottlenecks stoking the highest inflation among major economies, Bloomberg reports. The target is part of Prime Minister Manmohan Singh's planned US$1 trillion revamp of choked transport and power networks to achieve faster expansion.
The push must transcend a history of insufficient investment, which has left the world's most populous democracy trailing a Chinese economy now more than three times larger.
'If there isn't enough capacity, you lose time and it adds to cost,' said Leif Eskesen, a Singapore-based economist at HSBC Holdings plc who worked at the International Monetary Fund. 'India is poised for continued strong growth over the medium and long term, but further reforms are a must to bring sustained double-digit growth within reach.'
India's prime minister is relying partly on investment by companies such as DP World Ltd and AP Moller-Maersk A/S to lift capability at ports to 3.1 billion tonnes by 2020 from 963 million tonnes in 2010.
Achieving this objective would enable greater imports of items from electronics to oil, helping damp inflation by better feeding consumer demand.
Deeper berths for bigger container ships also are pivotal to India's attempt at galvanising exports of items from clothes to cars.
Port projects worth 103 billion rupees (S$2.7 billion) are under construction or implementation, Ministry of Shipping figures show.
They involve the government and private enterprise, and include a 35-billion-rupee liquefied natural-gas terminal at Cochin in the south and the 14.6-billion-rupee development of berths and a terminal in western Mumbai city.
Mr Singh's effort to take advantage of India's ports potential is the latest chapter in a history of maritime commerce dating from as early as the third millennium BC, when boats sailed from the north-western Indus Valley to Mesopotamia.
The spice trade with India later helped feed the Portuguese empire, before leading to colonisation by the British.
The nation has 13 major ports overseen by the central government and 187 smaller harbours, together accounting for 90 per cent of Indian exports by volume, according to the shipping ministry.
India imports more than it exports and had a trade deficit of almost US$105 billion in the last fiscal year.
Some terminals are managed by foreign businesses, including APM Terminals, a unit of Maersk, Denmark's biggest company.
APM operates Gujarat Pipavav Port Ltd and a terminal at the Jawaharlal Nehru Port in Mumbai.
Dubai-based DP World, the world's fourth-largest port operator, has terminals at five locations from Mundra in the north-west to Cochin in the south.
The push to add wharves and deepen drafts must overcome a legacy of inadequate investment in a nation that fell 10 places in the infrastructure ranking to 86th among countries in the World Economic Forum's 2010-2011 Global Competitiveness Report.
Spending on ports may amount to 406 billion rupees for the five-year period ending March 2012, less than half the original aim, according to the planning commission.
'I am not sure about the ability to implement the projects,' said Laveesh Bhandari, a director of Indicus Analytics, an economics research firm in New Delhi.
'I have no doubt that they will plan well, but execution and implementation will remain the problem area.'
Cargo handling is more than twice as costly as in Singapore and takes over four days on average compared with six hours in Hong Kong, research by India's Department of Commerce shows.
Sufficient rail and road links to ports also are lacking, said Prakash Tulsiani, managing director of Gujarat Pipavav Port.
The government should let terminals set tariffs rather than regulate prices, he said. Officials set fees for major harbours.
Even as obstacles remain, port investment is on course to jump 76 per cent in the five years through March 2012 from 230 billion rupees in the previous five-year period, planning commission data show.
India's Maritime Agenda has set a spending goal of 2.77 trillion rupees by 2020.
Further overhauling regulations that deter investment and relaxing labour laws that make it difficult to hire and fire workers can add 2.5 percentage points of growth to Asia's third- largest economy, Credit Suisse Group AG estimates.
Privately managed ports show the benefits of liberalisation, said Vinayak Chatterjee, chairman of Gurgaon, India-based Feedback Ventures Ltd, which advises on construction projects.
'They are far more aggressive and dynamic and customer friendly,' he said. 'Once allowed to implement and operationalise, they deliver. The bottlenecks seem to be at the policy level.'
The push must transcend a history of insufficient investment, which has left the world's most populous democracy trailing a Chinese economy now more than three times larger.
'If there isn't enough capacity, you lose time and it adds to cost,' said Leif Eskesen, a Singapore-based economist at HSBC Holdings plc who worked at the International Monetary Fund. 'India is poised for continued strong growth over the medium and long term, but further reforms are a must to bring sustained double-digit growth within reach.'
India's prime minister is relying partly on investment by companies such as DP World Ltd and AP Moller-Maersk A/S to lift capability at ports to 3.1 billion tonnes by 2020 from 963 million tonnes in 2010.
Achieving this objective would enable greater imports of items from electronics to oil, helping damp inflation by better feeding consumer demand.
Deeper berths for bigger container ships also are pivotal to India's attempt at galvanising exports of items from clothes to cars.
Port projects worth 103 billion rupees (S$2.7 billion) are under construction or implementation, Ministry of Shipping figures show.
They involve the government and private enterprise, and include a 35-billion-rupee liquefied natural-gas terminal at Cochin in the south and the 14.6-billion-rupee development of berths and a terminal in western Mumbai city.
Mr Singh's effort to take advantage of India's ports potential is the latest chapter in a history of maritime commerce dating from as early as the third millennium BC, when boats sailed from the north-western Indus Valley to Mesopotamia.
The spice trade with India later helped feed the Portuguese empire, before leading to colonisation by the British.
The nation has 13 major ports overseen by the central government and 187 smaller harbours, together accounting for 90 per cent of Indian exports by volume, according to the shipping ministry.
India imports more than it exports and had a trade deficit of almost US$105 billion in the last fiscal year.
Some terminals are managed by foreign businesses, including APM Terminals, a unit of Maersk, Denmark's biggest company.
APM operates Gujarat Pipavav Port Ltd and a terminal at the Jawaharlal Nehru Port in Mumbai.
Dubai-based DP World, the world's fourth-largest port operator, has terminals at five locations from Mundra in the north-west to Cochin in the south.
The push to add wharves and deepen drafts must overcome a legacy of inadequate investment in a nation that fell 10 places in the infrastructure ranking to 86th among countries in the World Economic Forum's 2010-2011 Global Competitiveness Report.
Spending on ports may amount to 406 billion rupees for the five-year period ending March 2012, less than half the original aim, according to the planning commission.
'I am not sure about the ability to implement the projects,' said Laveesh Bhandari, a director of Indicus Analytics, an economics research firm in New Delhi.
'I have no doubt that they will plan well, but execution and implementation will remain the problem area.'
Cargo handling is more than twice as costly as in Singapore and takes over four days on average compared with six hours in Hong Kong, research by India's Department of Commerce shows.
Sufficient rail and road links to ports also are lacking, said Prakash Tulsiani, managing director of Gujarat Pipavav Port.
The government should let terminals set tariffs rather than regulate prices, he said. Officials set fees for major harbours.
Even as obstacles remain, port investment is on course to jump 76 per cent in the five years through March 2012 from 230 billion rupees in the previous five-year period, planning commission data show.
India's Maritime Agenda has set a spending goal of 2.77 trillion rupees by 2020.
Further overhauling regulations that deter investment and relaxing labour laws that make it difficult to hire and fire workers can add 2.5 percentage points of growth to Asia's third- largest economy, Credit Suisse Group AG estimates.
Privately managed ports show the benefits of liberalisation, said Vinayak Chatterjee, chairman of Gurgaon, India-based Feedback Ventures Ltd, which advises on construction projects.
'They are far more aggressive and dynamic and customer friendly,' he said. 'Once allowed to implement and operationalise, they deliver. The bottlenecks seem to be at the policy level.'