India Needs Better Port Infrastructure to Expand Exports

India aims to become a major worldwide exporter of mini cars and sub-compact models. However, the country needs to improve its port infrastructure to fulfill this ambitious goal. Although there are 13 major ports in India, many of them are unable to handle an increase in capacity. In fact, India ranks 83rd (out of 139 nations) for the quality of its port infrastructure, according to the World Economic Forum’s Global Competitiveness Index 2010-2011.

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India’s government recognizes this bottleneck and has earmarked INR 50 billion (US $1.07 billion) worth of tax-free bonds for the development of major ports in the financial year ending March 2012. India’s Ministry of Shipping will bid on as many as 23 projects worth INR 170 billion (US $3.7 billion) this year.

In addition, the Ministry aims to create seven new ports by 2017, with a public and private investment of INR 350 billion (US $7.6 billion). Under India’s Maritime Agenda 2020, the goal is to increase capacity at India’s ports to three billion tons at an investment cost of INR 3 trillion (US$ 65 billion).

All of this looks very impressive on paper, but the important question is how quickly these plans will be translated into completed projects on the ground. In the past, such massive infrastructure projects have been overset with delays.

Perhaps, this is why Maruti Suzuki decided to make its own investment in a dedicated car-handling facility at Mundra Port in 2008, just before it started exporting its A-Star (sold as the Alto) to Europe. Similarly, Hyundai built a multi-level car park at the Chennai Port to enhance the capacity of its car terminal at that port. Continue reading ›