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Indian port industry to grow 4-7 pc over next 5 years, supported by rising imports, declining freight costs: Report

ANI March 16, 2025 172 views

India's port industry is experiencing a transformative phase with projected 4-7% growth over the next five years. The sector's strategic location and robust infrastructure position it as a critical enabler of national trade and economic development. Major and non-major ports are showing promising performance, with cargo traffic steadily increasing across different segments. The maritime ecosystem is set to benefit from improved infrastructure, global supply chain normalization, and declining freight costs.

"India's ports manage 95% of export volumes and 70% of export values" - Motilal Oswal Report
New Delhi, March 16: Indian port industry will grow at the rate of 4-7 per cent over the next five years, supported by rising imports, a decline in freight costs, and the normalization of global supply chains, according to a report by Motilal Oswal.

Key Points

1

Cargo traffic expected to grow 3-6% annually

2

Port capacity to increase 500-550 MTPA by 2028

3

Major and non-major ports playing crucial development roles

As per the report, the cargo traffic is expected to grow at a steady annual rate of 3-6 per cent, with utilization rates stabilising at approximately 55 per cent over the medium term.

Transshipment, which currently accounts for about 25 per cent of India's container throughput, remains a critical segment, with key ports like Chennai playing a pivotal role in facilitating this segment.

According to the report, between the Financial Year (FY) 2023 and FY28, India's ports are expected to increase their capacity by 500-550 MTPA annually, driven by continued growth in petroleum, oil, and lubricants (POL) handling, as well as coal and containerised cargo.

The report added that the growth of ports will be driven by an increase in the handling of petroleum, oil, lubricants (POL), coal, and containerised cargo.

India's ports currently manage 95 per cent of the country's export volumes and 70 per cent of its export values, showcasing the sector's critical role in facilitating trade.

With a coastline stretching approximately 7,500 km and 20,275 km of national waterways across 24 states, India's ports benefit from a strategic location in the Indian Ocean. This positioning is aligned with 80 per cent of the global maritime oil trade, which enhances the country's potential to become a dominant player in the maritime sector.

The Indian ports infrastructure includes 13 major ports and 205 non-major ports.In FY24, major ports handled 819 MMT of cargo, and in the period from April 2024 to January 2025, this number stood at 699 MMT. Overall, the sector operates with a capacity of 2,604 MTPA, but this is expected to expand significantly in the coming years, the report added.

The report also highlights the distinct roles that major and non-major ports play in India's port ecosystem.

Major ports, which are managed by the central government, are primarily located near industrial hubs and handle a wide range of cargo types based on regional demands.

In FY23, non-major ports saw a 7.6 per cent increase in cargo traffic, outperforming the 4.7 per cent growth observed at major ports.The report adds that both major and non-major ports will play crucial roles in driving the overall development of the sector.

The growth in cargo traffic, along with improvements in port infrastructure and operations, positions India's ports to remain a key enabler of trade and economic growth for years to come, the report adds.

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