To achieve the ambitious target of having a 5% share in world exports and climb up the ranks in ease of doing business, India needs to address its port ecosystem, says a report commissioned by government think tank Niti Aayog. The report says that processes and operations across India’s ports are not standardized or uniform, costs and time for key processes are unpredictable and there is an unacceptable level of variation across ports as well as within ports.
It listed five issues—port congestion, custom clearance, shipping line issues and charges, documentation and paperwork and regulatory clearances—as the major hurdles leading to detention and demurrage challenges faced by traders in.
The study, Port Logistics: Issues and Challenges in India, undertaken by advisory firm Dun & Bradstreet (DNB) on behalf of Niti Aayog identifies the major problems faced on the ground by the end-users of ports—exporters, importers and freight forwarders.
It also ranked 13 major ports and one non-major port on a Port Performance Index. It rated four ports (Mundra, JNPT, Kamarajar, Vizag) as good; seven (Cochin, Kandla, Paradip, Chennai, Mormugao, New Mangalore and VOC) as average and three (Haldia, Kolkata and MbPT) as poor.
The report comes at a time when major ports in India have been witnessing a good growth. As per the shipping ministry’s latest figures, the major ports in India have recorded a growth of 4.58%, handling 560.97 million tonnes of cargo during from April 2017 to January 2018 as against 536.41 million tonnes during April 2016 to January 2017.
Manish Sinha, managing director of Dun and Bradstreet – India said, “To increase India’s share in world exports, we need to strengthen India’s industrial sector and increase its product competitiveness. And to enhance product competitiveness, we would have to improve the infrastructure for trade. Ports are a key part of trade infrastructure.” He added that if the issues of the report are resolved in a set time-frame, it would further facilitate ease of doing trade in India.
While the DNB report emphasises strengthening port infrastructure, the shipping ministry is undertaking an ambitious Sagarmala project to promote port-led development. Under Sagarmala, the ministry aspires to reduce logistics costs for EXIM and domestic cargo leading to overall cost savings of Rs35,000 to 40,000 crore per annum.
A shipping ministry official on condition of anonymity said, “We were not aware about the Niti Aayog’s report. The ministry had earlier appointed an advisor and has been already introducing several changes suggested by them for ease of doing business.” These included exclusion of services of transportation of import cargo by ships on voyage charter from negative list, zero rating of services of transportation of export cargo by Indian ships and implementation of e-payment mode for collection of ocean freight.