Gadkari: Shipping to add 3-4% to GDP

Maritime industry in the world contributes positively to the development of trade. Sadly with a coastline of 7500 km, India has not been able to capitalize on trade. A robust maritime logistics sector along with a slew of modern and efficient port infrastructure related policies will drive economic growth. The First Maritime India Summit, manages to push reforms in the right direction.

Sairaj Iyer | The Dollar Business Bureau

Nitin Gadkari, the minister for shipping, ports and waterways continued to carry the strategic port-led development agenda on the second day of Maritime India Summit. On the first day, the Prime Minister spoke of critical development agendas, and strategic investment opportunities available within shipping and inland water development projects. If the first day was magical, the second day proved to be better with politicians and celebrities gracing the occasion. 

On the second day, the CM of Maharastra, Devendra Fadnavis, Kim Young Suk, Minister for Oceans and Fisheries - Korea, Nirmala Sitharaman, Piyush Goyal, Sanjeev Balyan, Min. of State for agriculture, and the chiefs of Indian ports spoke about the future of the shipping industry, opportunities to create employment, tourism, and culture. 


During the valedictory session Gadkari shared the report-card of his ministry with the Home Minister Rajnath Singh. Gadkari promised the creation of nearly 1 cr. jobs, and investments with various opportunities in ports, ship building, maritime education and skills development. He chalked out a detailed expenditure plan of Rs.83,000 crore investments from 141 MoU's that were signed during the two day expo. Extolling the operations of the 18 Govt ports, Gadkari remarked that, “We are far profitable from the private ports. In fact, within the next 2-3 years we will be adding 3-4% to the national GDP.”

Speaking on the occasion the Rajnath Singh appreciated the new development in the industry of coasts and shipping. He said, “India has abundant knowledge and expertise in technical capital and manpower in the shipping industry. There are potential investments in this industry. We need a 360° approach to build this sector, and Nitin is doing a great job. I was the minister myself, and understand the ground realities and complexities. From Allahabad to Haldia, not only has the plan been chalked out, but work has already commenced. 1000-5000 dredging facilities can be driven in the river Ganges. The project will not only redefine, but will also revolutionize inland water ways.”

18 new agreements were signed on the second day taking the final count to 35. Major investments and revenues close to $11,000 m were contributed to the development of the Sagarmala port; other ports were allocated $23454 m, hinterland connectivity and multi-modal logistics facilitated an investment of $21857 m. 


Later during a panel discussion, Nitin Gadkari, was confident that Sagarmala could provide a solution to all the shipping industry’s needs. 4 new ports have been planned to begin with. 75 connecting ports, 10 express ways, 7 ICDs, 4 pipelines, and 50 last mille connectivity projects have been identified. The government looks at boosting the share of coastal and inland waterways in cargo transportation from 6% to 10%.

Comparing the logistics costs and freight handling between China and India, Gadkari said, the cost of logistics in China is 8%, while in India, it is 18%. The distance between port to industry in India is 700-800 km, whereas the average is about 150 km in China. And, with reference to handling freight-traffic, China makes use of 40% of water-route trade, while India uses only 6%. “These are one of the many reasons why our industries fail to compete against the Chinese prices in international markets. Water and shipping are crucial in reducing product costs,” he said. 


Through Sagar-mala, an integrated shipping approach, the industry will reduce the cost of operations from 18% to 10%. During a panel discussion, Gadkari pointed out that the project will, “give miraculous results for the industry.” Sagar-mala will involve 7 multi-modal hubs, and provide connectivity across sea and land.  111 rivers have been converted into inland water ways, and 48 DPRs (detailed project report) have been completed. There are 16 projects in inland water ways for which the DPR is already finalized and Gadkari expressed confidence that work would commence soon.

“Of the 12 lakh crore investments in Sagar mala, the details are available, and investors can decide where to invest,” the minister said pointing to the investor sheet. “Suresh Prabhu is already interested in the development of Sagarmala. We are importing petrol and diesel of 5 and 6 lakh crores. At Haldia, our railway engine is running on bio-diesel, and it would be used in railways too. We will use green energy, and am confident that it would be the best import-substitute and a cost-effective one too. It could be a game-changer in the future. Let’s take advantage of the effort,” he concluded.

The Dollar Business Bureau - Apr 16, 2016 12:00 IST