The Indian Prime Minister’s Office has given the green light to an ambitious, multi-faceted strategy designed to elevate the nation’s maritime sector. Central to this plan is the allocation of at least Rs 25,000 crore from the Maritime Development Fund (MDF), aimed specifically at bolstering port development efforts.
Sagarmala Development Company Ltd (SDCL) has been tasked with the critical role of expanding port capacities. To streamline and facilitate these large-scale investments, SDCL is set to become a Non-Banking Financial Company (NBFC) by 2025. This transformation is expected to better position SDCL to channel funding into key infrastructure projects.
The infusion of capital from the MDF will support a range of developmental activities, including the construction of new port terminals, building breakwaters, dredging operations to deepen navigational channels, and enhancing backend infrastructure. These improvements are aimed at providing more efficient access for freight trains and trucks, thereby strengthening the logistics chain.
The Ministry of Ports, Shipping, and Waterways has highlighted that addressing financial constraints is vital for the 12 major ports, which are also grappling with physical space limitations. This financial boost is seen as a significant step to address these challenges and pave the way for future growth.
A 2023 report by Crisil noted that developing a container terminal capable of handling one million TEUs requires substantial investment, typically ranging from Rs 10 billion to Rs 15 billion. Such high capital requirements can often be a deterrent for private investors, particularly in the initial phases of development.
Despite a 46 per cent surge in freight traffic through both public and private ports from FY15 to FY24, growth has largely been concentrated in major hubs such as Jawaharlal Nehru Port Authority (JNPA), Deendayal, Paradeep, and Mundra—the latter operated by Adani. To alleviate congestion, authorities are considering the establishment of new ports in less dense areas near existing major ports. This strategic approach would allow older ports to gradually reduce their load, balancing traffic more effectively across the network.
The allocation of additional capital to SDCL is expected to be a pivotal component in realizing these development plans. The 12 major ports, managed at the federal level, face an urgent need for investment as projections indicate continued growth in ocean-going traffic, with an annual compound annual growth rate (CAGR) of nearly 5 per cent. Notably, in the first half of FY25, the ports experienced a 4.6 per cent increase in traffic, underscoring the necessity for accelerated investment to meet rising demand.
With these strategic measures in place, India’s maritime sector is poised to strengthen its infrastructure and capacity, positioning itself to handle future growth and maintain competitiveness on the global stage.