Bulletin No.2 | Wednesday, March 03, 2021

With more than 7,500-km of coastline, India has a natural advantage to be in the leading position in maritime sector. However, India bears a huge logistics cost, as big as 13 to 14 percent of GDP. The panel in this session discussed various aspects to reduce the logistics cost. They focused on ease of doing business, hinterland and multimodal connectivity.

The panel highlighted that ease of doing business is primarily concerned with how day to day business is handled while trading across borders. It entails time and cost element for import and export under border and documentary compliance. India’s ease of doing business ranking has gone up to 63 worldwide but still more improvements are required. It was also noted that if coastal transportation has a number of advantages such as low greenhouse gas emission, low cost per tonnage, etc., it also has certain challenges such as low last mile connectivity, broken chain, extra nodes for transshipment, limited digitalisation, etc.

Furthermore, it was discussed that towards accelerating trade and increasing ease of doing business, India should focus on the following aspects, which are, consistency, policy intent, connectivity, transparency, digitalisation and trade deals. The government of India is also committed to reduce costs for logistics from 14 percent to 8 percent under National Logistics Policy through collaboration with various ministries.

The session was moderated by T K Ramachandran, Chairman, V.O. Chidambaranar Port Trust; Sunil Paliwal, Chairman, Kamarajar Port Limited. The speakers at the session were Wim Dillen, International Development Manager, Port of Antwerp; Emile Hoogsteden, Vice President Commercial, Port of Rotterdam Authority;  Dipl.-Ing. Thomas Schlipköther, Member of the Executive Board, Chief Operating Officer and Chief Technical Officer, Head of Port Authority, Duisburger Hafen AG; Steve Felder, Managing Director – South Asia, AP Moller Maersk Group; Pawan Kumar Aggarwal, Special Secretary-Logistics, Ministry of Commerce and Industry, Government of India; K Sanjay Murthy, Managing Director and Chief Executive Officer, National Industrial Corridor Development Corporation; Rahul Modi, Managing Director, Pushpak Logistics Solutions LLP and President, Coastal Container Transporters; Capt. Rakesh Singh, Hon. Secretary, ICC Shipping Association.

Inland waterways are fuel-efficient, cost-effective and environment-friendly mode of transport. This was a catalytic statement from one of the panellists adopted to set the theme of the session.  It was highlighted that India has around 15000 kilometers of navigable inland waterways which have huge potential in terms of facilitating trade as well as tourism. Development of eastern waterways connectivity transport grid comes as a top priority of the Government of India. The Ministry of Ports, Shipping and Waterways is undertaking dedicated policy efforts to promote high-speed Ro-Ro and Ro-Pax to promote cargo and passenger movement. 

Indian cargo movement through inland waterways is beginning to unfold while lots of water borne civil aviation access is waiting to take off. The launch of India's first seaplane service from Sabarmati riverfront in Ahmedabad to the Statue of Unity in Kevadia in Gujrat is a testimony of that. 

Connectivity through waterways is crucial for facilitating regional connectivity and to enhance the scope for alternative and diversified supply chains as a response to the Covid-19 pandemic. Beyond that, environmental realities and the complexity of logistic challenges etc. are the indicators for the increasing need for multi- modalities of logistics in this region. This is one of the drivers that has promoted and recognised the importance of inland waterways. Similarly, keeping waterways at the center, development of railway, coastal, aviation and road linkages are important for improving multi-modal connectivity of India with the world.   

In essence, the panel highlighted the need of creating multi-modal transport linkages between inland waterways, coastal, railway and highway, undertake sustainable dredging and river training strategies, promote, river cruise tourism in India and seaplanes opportunity, promote urban water transport for establishing last mile connectivity through Ro-Ro and Ro-Pax services and embrace use of  innovative technologies in inland waterways sector while promoting eastern waterways connectivity transport grid with neighbours, among others.

The panel included: Rajiv Jalota, Chairman, Mumbai Port Trust;  Pravir Pandey, Vice Chairman, Inland Waterways Authority of India; Amita Prasad, Chairperson, Inland Waterways Authority of India; Ambassador Vikram Doraiswami, High Commissioner of India to Bangladesh; Capt. Anil Kishore Singh, Chairman, FICCI Sub-committee on Inland Waterways and Coastal Shipping and Chief Executive Officer (Inland Waterways and Dredging), Adani Ports & SEZ; Harrie De Leijer, Partner, STC-NESTRA BV; Sergey Lazarev, Head of export department, SSSR-FLEET; Pratap Talwar, Managing Principal, Thomson Design Group; Arnab Bandyopadhyay, Lead Specialist - India Transport, World Bank; Ajay Singh, Chairman and Managing Director, Spicejet Ltd and Raj Singh, Chief Executive Officer, Heritage Cruise.

International trade is one of the most significant engines of growth which is propelled by the shipping sector. This has accelerated the discourse of sustainable financing for maritime sector to overhaul the shipping domain. Even though the pandemic has strained the condition but the stabilisation in the arena is undertaken through global economic recovery mechanisms along with a push to the idea of green shipping and financing.

The panel while delving into the discussion highlighted the imperative of transition from asset based to cash flow based model while taking into consideration green financing solutions to accelerate climate action in that domain.  This shall not only improve the situation in monetary sense but also reduce the carbon footprint by addressing the environmental concerns. 

A way forward was discussed which emphasised on the need of long term financing, tapping of international capital markets, credit enhancement, PPP models, capacity building and other associated aspects. It can be validly deduced that the shipping sector has huge potential but needs reformation in terms of regulatory framework to maximize the growth prospects.

The panel included: H K Joshi, Chairman and Managing Director, Shipping Corporation of India; Venkata Ramana Akkaraju, Chairman, New Mangalore Port Trust Mr. Dilip Kumar Gupta, Managing Director, Sagarmala Development Company Limited; Ashwani Bhatia, Managing Director, State Bank of India;  David Rasquinha, Managing Director, EXIM Bank; Vinod Giri, Managing Partner, National Investment and Infrastructure Fund;  Sebastian Blum, Director - Maritime Industries- Europe, Asia, Americas, KfW IPEX-Bank; Sue Ann Gan, Partner, Norton Rose Fulbright (Asia) LLP; Subhash Chandra Khuntia, Chairman, Insurance Regulatory and Development Authority;  Devesh Srivastava, Chairman and Managing Director, General Insurance Corporation of India; Arti Mathur, General Manager, Oriental Insurance Company Limited;  Kuhu Mohapatra, Deputy General Manager, New India Assurance Company Limited; Capt. Rahul Khanna, Global Head of Marine Risk Consulting, Allianz Global Corporate and Specialty.

Leveraging port ecosystem for industrialisation and generating new employment opportunities 

The panel noted that Indian maritime sector has been playing a major role in economic development since ages and the oldest known port, Lothal, in Gujarat existed about 4500 years ago. India’s contribution in the world’s merchandised trade in the 18th century was 18 percent. Traditionally ports and waterways were considered as the terminals of transportation of goods and people. Other modes of transportation emerged with the growth of population, but they resulted in drastic environmental degradation. 

In this context, it is important for India to shift its focus to a water transport system for a cleaner environment and this will reduce the logistics cost in India. Ports play a vital role in facilitating trade through water and they can lead to industrialisation, thus generating new employment opportunities. 

In the discussion panellists pointed that India can learn from global best practices  from ports like Rotterdam, Singapore, Foujian, Houston and Dubai, about their success largely to vibrant economic clusters in vicinity. Vizag port gives a best example for port led industrialisation in India. Maritime clusters should be developed in areas where there are comparative advantages, expertise, synergy, availability of raw materials and other logistics. This will facilitate higher productivity and innovation. Enhancing regional connectivity and digitisation are areas that should be nurtured for port-led industrialisation.

The discussion brought out the evolution of ports in different stages, from centres of cargo handling in the first stage, to centres of logistics hubs in the second stage and to as the centres of industrial and supply chain hubs in the current stage. It also noted that the next generation ports will cater to the industry trends such as expanded logistics reach, speed to market, increased sourcing alternatives, focused manufacturing and vertical specialisation. 

Speakers: Lt. JG. Kamolsak Promprayoon, R.T.N., Director General Port Authority of Thailand Port of Thailand), Bhushan Kumar, Joint Secretary-PPP, Ministry of Ports, Shipping and Waterways, Ki-chan Nam, Chief Executive Officer, Busan Port Authority, Jose Firmo, Chief Executive Officer, Port of Acu,  Sanjay Sharma ,Vice President, ArcelorMittal, Vincent De Saedeleer, Honorary Vice President, Port of Zeebrugge, Gert-Jan Nieuwenhuizen, Managing Director, Port of Amsterdam.

The discussion was about green initiatives, reducing pollution, renewable energy use and generation in the maritime sector. The green ports of India include: Cochin ports, Adani ports and SEZ, Vishakapatnam ports and Deen Dayal port. The V.O. Chidambaram port, Kamraja port and Deen Dayal port have signed deals for wind energy projects.  These ports have the potential to be the biggest ports of India and become the first global green ports. India’s Maritime sector has a 10 year vision known as the “Maritime India Vision, 2030”. This vision is targeted to increase the share of renewable energy by 60 percent at the ports.

India also has a set of National Action Plan to promote green shipping. There are various strategies taken by the government of India for promoting renewable energy, such as reducing regulatory risk, payment risk and such others. Currently, Solar Energy Corporation of India is implementing the hybrid project at a few ports of India. Hydrogen mission has been announced on production and utilisation of Green Ammonia. The Indian coastal ports are ideal for facilitation of the Green ammonia. 

There are new initiatives on gassing up and cooling down operation for LNG ships. Also, a very innovative pilot project is undertaken by the Petronet LNG Ltd. on conversion of fishing boat engines. The discussion aims to make Indian ports more eco-friendly by 2030 by following the footsteps of Oslo port, Rotterdam port, Singapore port and Antwerp port. These international ports have already started using new technology and renewable energy for better future.

Speakers of the panel included:  JN Swain, Chairman and Managing Director, Solar Energy Corporation of India; Ingvar M Mathisen, Port Director/Chief Executive Officer, Port of Oslo; Akshay Kumar Singh, Managing Director and Chief Executive Officer, Petronet LNG Limited; Camille Egloff, Managing Director and Senior Partner, BCG Athens, Global Transportation and Logistics Leader; Christian Sovik, Senior Vice President -Sales, Corvus Energy; Sanjay Verma, Director- Decarbonization Solution, Wartsila Singapore Pvt Limited; Tomoaki Ichida, General Manager, Energy Business Strategy, Mitsui OSK Lines Japan & President, e5 Lab Inc.