With the primary goal of allocating at least Rs 25,000 crore from the Maritime Development Fund (MDF) to port development, the Prime Minister’s Office has approved a comprehensive three-pronged plan to advance India’s maritime industry.
In order to further facilitate these investments, the Sagarmala Development Company Limited (SDCL), which has been tasked with increasing port capacities, plans to become a Non-Banking Financial Company (NBFC) by 2025.
Along with backend infrastructure to facilitate better access for trucks and freight trains, this financing will allow the building of additional terminals, breakwaters, and shallow channel dredging.
The large funding boost to SDCL for domestic port investments stands out as a crucial step forward, according to a Ministry of Ports, Shipping, and Waterways official. The 12 major ports currently deal with two main problems: limited physical space and financial constraints.
A 2023 Crisil estimate states that an investment of between Rs 10 billion and Rs 15 billion is required to create a container terminal with a capacity of one million TEUs. The size of this capital required frequently discourages early private sector participation.
The Jawaharlal Nehru Port Authority (JNPA), Deendayal, Paradeep, and the Adani-operated Mundra ports have seen the most of this expansion, even though freight traffic across both government and private Indian ports increased by 46% between FY15 and FY24.
Building new ports in less crowded, peripheral areas close to current facilities is one suggested solution, which would enable the older ports to gradually shrink. Thus, “the additional capital allocation to SDCL will be crucial,” a representative of the sector stated.
Funding is desperately needed for all of India’s “major ports,” which are under the control of the central government, to handle the anticipated spike in ocean-going traffic, which is predicted to increase at a CAGR of around 5% annually. Traffic increased by 4.6% in the first half of FY25 alone, highlighting the need for more investment.
