India’s creeping port acquisitions open a sea of opportunities for local firms

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After Chabahar, India is reportedly on course to gain the rights to operate a second overseas port, Sittwe, located in the Rakhine state of Myanmar. There is though no official corroboration yet. Ports in the Indian Ocean have become hot property as China on one side and the India-US combine on the other race to invest in them.

The pace is quickening given the Ocean's growing role as a key global trade corridor for commodities. After Maldives, which has clearly begun to hand over its port at Male to China, the involvement in Sittwe signals victory for India at the opposite end of the Indian Ocean. China is hamstrung as it does not have direct access to the Ocean.

All its export and import trade has to operate through the narrow Straits of Malacca, so it feels threatened in a world where the security of supply chains has become one of the most significant concerns. India is hamstrung in another way as it has shown little interest in securing its own supply chains and has only recently woken up to the risks this poses. Acquiring strategic interests in ports is a costly endeavour.

It costs at least $1 billion to develop a basic port infrastructure anywhere in the globe. Doing it abroad also means having to invest in the tricky geopolitical dynamics. At Chabahar, where India operates two terminals, one a container and the other a dry cargo, the Iranian government has mandated an annual ratification of India's ten-year lease.

This requirement raises the costs for India Ports Global Ltd, the same company that will run the Sittwe port. This is further complicated as conventional economic wisdom will say many of the ports in the Indian Ocean do not have a very clear economic rationale for their expansion. The nations hosting