Despite having the potential to become a maritime power house, India cannot utilize its full potential until it integrates the dispersed logistic activities of maritime trade. Comment.

Maritime trade accounts for approximately 90% of India’s trade by volume and 60% of India’s trade by value. Dispersed nature of maritime Logistic is a hindrance to efficient Logistics.

Dispersed nature of maritime trade Logistics:

  • High number of clearances and regulatory hurdles.
  • Lack of inter-modal connectivity.
  • Lack of hinterland connectivity.
  • Different regulatory regions for major and minor ports.

Measures taken by India:

  • Sagarmala project – to boost port infrastructure and increase connectivity of ports with hinterland.
  • Major Port Authorities Act – to enable structural reforms aimed at reforming regulation and operation of major ports.
  • Increase private participation through asset monetization (NMP).
  • Bharatmala Pariyojana – to enhance inter-modal connectivity with ports.
  • Strengthening of inland waterways.

Despite above steps taken, challenges remain:

  • Port infrastructure is lacking.
  • Poor ease of doing business performance on port clearances.
  • Logistics cost is high – 14% of GDP (~10% for development Nations).

Measures needed:

  1. Infrastructural:
    • Enhance capacity of ports to handle large cargos.
    • Frequent dredging and cleaning operations.
    • Innovative models to promote PPP, such as hybrid-annuity.
  2. Administrative:
    • Further liberalize major ports administration, on lines of act of 2021.
    • Digitize all operations at ports to enhance transparency.
    • Pre-clearances of shipments as followed in developed countries.
  3. Encourage multi-modal connectivity, through the development of inland waterways, last-mile waterways, etc.
  4. Parity of Indian ships with foreign ships by doing away with current discriminatory regime.

Maritime trade efficiency can help trap potential of India’s exports and boost economy to reach dollar 5 trillion target.

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