MIS 2016: India sets sail
With an aim to boost the maritime sector and remove unnecessary hurdles, the government organised the maiden Maritime India Summit 2016 in Mumbai in April 2016.
Under the aegis of ‘Make In India’ programme initiated by Prime Minister Narendra Modi, the maiden Maritime India Summit 2016 (MIS 2016) and the first of its kind meet in India, focussed on restoring India’s position in the global maritime sector. The summit was inaugurated by Prime Minister Narendra Modi on April 14, 2016 which was also the 125th birth anniversary of Dr. Babasaheb Ambedkar who is considered as the architect of the water and navigation policy in India. transportation, coastal shipping, lighthouse tourism and cruise shipping, hinterland connectivity and logistics handling facilities. The Ministry of Shipping was showcasing about 250 projects with investment opportunity in the maritime sector. These projects include various infrastructure development opportunities in 12 Major Ports, projects in eight maritime states and other agencies. Apart from two halls dedicated to the exhibition, the summit also had a Maritime heritage museum, built in the shape of ship, by the JNPT.
The PM announced the government’s plan to mobilise an investment of one trillion rupees (`1
lakh crore) in the port sector to channelise economic growth. “Five new ports are planned to meet the increasing demand of the EXIM trade. We want to modernise ports and integrate them with SEZs, portbased smart cities, industrial parks, warehouses, logistics parks. India is promoting coastal shipping in a big way and developing 14,000 km of navigable inland waterways in the country. We are committed to creating an enabling environment for investors and to facilitate investments with an open mind. I call upon the global business community to partner with us to give shape to our process of port-led development,” Modi announced. He also interacted with global CEOs from the port and shipping sector.
The Sagarmala National Perspective Plan identifies specific opportunities for transportation of commodities such as thermal coal, fertilizers
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The summit had a dedicated pavilion for exhibitors from South Korea with a delegation of over 100 participants. A MoU was signed by Nitin Gadkari, Minister of Road, Transport, Highways & Shipping, Government of India and Kim Young Suk, Minister of Oceans & Fisheries, Government of the Republic of Korea, for cooperation and mutual assistance between the two countries in port related matters.
The MoU is expected to help both countries to encourage and facilitate the development of ports, port related industry, maritime relationship and cooperate in the tasks of sharing of technology, experiences in the fields of port development and operation, exchange of information on construction, building, engineering and related aspects in the field of port development, joint participation in port-related construction, building and engineering projects that both parties are interested in, exchange of experts including officials from the relevant ministries of each country in the field of port and related education and training.
India stands to gain from this agreement as South Korea has considerable expertise in port and shipping sector and can help India to modernise its ports and develop the shipping industry.
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The potential for port-led development in India had been constrained by high logistics costs, long lead times and poor linkages between industrial and logistics infrastructure. Growth was hindered by inadequate port capacity and the fact that solutions were often not tailored for coastal communities. Transportation by waterways has remained under-utilised in India, although waterways are cheaper compared to road and railways.
With the Sagarmala proposal being approved by the Cabinet, the government is pinning high hopes on the project that aims to promote port-led development in the country. The release of the National Perspective Plan that was done during the MIS 2016 is the first step towards this. The plan also takes forward the government’s core philosophy of cooperative federalism. The project will be fasttracked for completion from five to 10 years and offers investment
`12 opportunities of lakh crore. Gadkari said the plan had been crafted after detailed consultations with key stakeholders in the central and state governments, public sector companies as well as private players from shipping, ports, ship-building, power, cement and steel sectors. It takes forward Sagarmala’s vision of substantially reducing exportimport and domestic trade costs with a minimal investment. The report estimates that the Sagarmala programme could lead to annual logistics cost savings of close to `35,000
crore and boost India’s merchandise exports to $110 billion by 2025. About one crore jobs are estimated to be created, of which 40 lakh will be direct employment.
The Sagarmala programme of the Ministry of Shipping, aims to replicate the successes that the United States, Japan, Korea and more recently, China has witnessed. The Sagarmala National Perspective Plan identifies specific opportunities for transportation of commodities such as thermal coal, fertilizers, food grains, cement and steel by coastal shipping and inland waterways.
Sagarmala aims to deliver impact through over 150 projects and initiatives in four broad areas: modernisation of existing ports and set up 5-6 new ports, focus on port connectivity through heavy haul rail corridor, freight-friendly expressways and development of strategic inland waterways, tapping into the potential of portled industrialisation through coastal SEZs housing a number of industrial clusters, and harnessing potential of coastal communities through skill development and increased economic opportunities.
Gadkari said, “This is the beginning. India suffers from excise and custom problems, rules and charges, fuel problems. We have been trying to understand these problems and look for solutions. The Sagarmala project is closely related to our industrial growth but most importantly for employment generation. Logistics and transport cost in India is very high. In China it is around 8-10 per cent, sometimes even six per cent. In India it is more than 18 per cent– three times more expensive
India’s vast coastline of 7,500 km offers a huge investment opportunity. Apart from the length of the coastline, India’s maritime potential also lies in its strategic location on all major shipping highways
than China. In European countries, it is 10-12 per cent. The reason behind this is that in China, more than 47 per cent of transport happens over water. In Japan and Korea it is 43-44 per cent. In Europe it is 40 per cent. We need to do that.”
He added that another reason for low costs in these countries is the proximity of industrial areas to the water body. “India did not pay attention to this after 1947. We currently have road length of 52 lakh km. Of this, only 96,000 km is the National Highway that takes 40 per cent of our overall traffic.
We have now decided to take the National Highway to two lakh km–it is already 1.5 lakh at the moment,” Gadkari said, adding that the Sagarmala project alone can bring down the logistics cost to 10 per cent.