Bloomberg recently reported on the Indian government’s aims to triple its port capacity in the next ten years. While India’s economy is strong–being the third largest in all of Asia–the country has reached a critical point where it must expand its infrastructure to keep up with its economic output.

In a recent interview, Indian Secretary of Shipping K. Mohandas noted that “urgent action” must be taken with port expansion. Current projections estimate that by the year 2020, Indian ports will process more than 2.5 billion tons of cargo per year. This past year, Indian ports handled about 845 million tons, while India’s full port capacity is estimated to be around 996 million tons.

In a detailed plan that is set to be released next month, the Indian government will reportedly sell port stakes and open new harbors in an effort to push annual capacity to 3.2 billion tons. There are also plans in the works to increase building of other modes of transportation, like highways, railways, and airports.

One way in which the government hopes to push port expansion is by corporatizing the currently state-controlled Jawaharlal Nehru Port. In addition, the state will award concessions for two new terminals for the Mumbai-based port at the end of the fiscal year, one of which will be able to process more shipments than the current three existing terminals taken together.

A Business Standard article reports on the investment possibilities inherent in container traffic. The article zeroes in on Gujarat Pipavav Port Ltd (GPPL), which is the biggest terminal and port operator in the world, and one of the first private sector port developers operating in the region. The report goes on to suggest that while prospects for investment in Indian ports, especially in the northern areas, which comprise 64% of the country’s container traffic, remain promising, the IPO’s expensive prices are cause for concern.

In any case, the bottom line dictates that the push to privatize previously state-controlled port logistics will undoubtedly open up more global and domestic investment opportunities in India in the future.

About the Author –

This guest post is contributed by Lauren Bailey, who writes on the topics of online colleges. She welcomes your comments at her email Id: blauren99 @gmail.com.

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