How India set course for a greater share in global maritime trade

Over 80% of global trade by volume and more than 70% by value moves by sea and is handled at ports, according to United Nations Conference on Trade and Development's (UNCTAD’s) Review of Maritime Transport. In India, about 95% of trade by volume and 68% by value is carried by maritime transport.

Seaports, therefore, underpin economic growth by enabling international and domestic trade.India’s 11,098km coastline hosts 12 major ports and 217 other than major ports (OMPs). Of the ‘major ports’ listed in the Seventh Schedule, Union List-List I (Entry 27) of the Constitution, 11 were historically port trusts under the Major Port Trusts Act, 1963 (now the Major Port Authorities Act, 2021).

OMPs are administered by maritime states and Union territories. The labels “major” and “OMP”, however, do not necessarily connote the relative size or importance.

Several OMPs handle more cargo than some major ports.In the nineties and early 2000s, the first wave of port reforms was initiated in Africa, Asia, and Latin America, with a general belief that privatizing some or all aspects of port operations would address public financing challenges, resolve performance issues, while meeting the surge in domestic and overseas trade. India was no exception, and the privatization of port operations at some major ports and by the state of Gujarat was initiated.At the request of the Indian government, the World Bank found publicly run major ports underperforming global benchmarks, raising user costs and eroding India’s domestic and international competitiveness.