India has a vast coastline of 7517 km with 12 major and 187 non-major ports that carry about 95 % of India's trade volume. It is an important natural resource for the country's trade.
The Sagarmala Project is a 12-year-old idea, first announced by former PM of India Atal Bihari Vajpayee during his independence day speech in August 2003. It could not be implemented because of apathetic attitude of the UPA government. However, the union cabinet chaired by the current PM, Narendra Modi, on March 25, 2016, gave its 'in principle' approval for the concept and institutional framework of Sagarmala Project.
The main objective of the Sagarmala project is to promote port-led direct and indirect development and to advance infrastructure to transport goods to and from ports rapidly, efficiently and economically.
(i) Port-led industrialization
(ii) Port-based urbanization
(iii) Port-based tourism and recreational activities
(iv) Short-sea shipping coastal shipping and Inland Waterways Transportation
(v) Shipbuilding, ship repair and ship recycling
(vi) Logistics parks, warehousing, maritime zones/services
(vii) Integration with hinterland hubs
(viii) Offshore storage, drilling platforms
(ix) Specialization of ports in certain economic activities such as energy, containers, chemicals, coal, agricultural products, etc.
(x) Offshore Renewable Energy Projects with base ports for installations
(xi) Modernizing the existing ports and construction of new ports.
The Sagarmala Project therefore plans to achieve the broad objectives of increasing the capacity of major and non-major ports and modernizing them to make them efficient, thereby enabling them to become torch bearer of port-led economic development, optimizing the use of existing and future transport assets and developing new lines/linkages for transport (including roads, rail, inland waterways and coastal routes), setting up of logistics hubs, and establishment of industries and manufacturing centers to be served by ports in export-import and domestic trade. In addition to strengthening port and evacuation infrastructure, it also aims at simplifying procedures used at ports for cargo mobilization and encourages usage of electronic channels for information exchange leading to quick, efficient, hassle-free and seamless cargo mobility.
All efforts would be made to implement the projects through the private sector and through Public Private Participation (PPP) wherever feasible. Funds requirement for starting the implementation of projects in the initial phase of Sagarmala Project is projected at Rs. 692 crores for the FY 2015-16.
Presently, Indian ports carry more than 90 % of India’s total export-import trade volume. However, the current proportion of merchandise trade in Gross Domestic Product (GDP) of India is only 42 %, whereas for some developed countries such as Germany and European Union, it is 75 % and 70 % respectively. Therefore, there is a great opportunity to raise the share of merchandising trade in India’s GDP.
With the Government’s “Make in India” initiative, the share of merchandise trade in India’s GDP is expected to rise and approach the levels achieved in developed countries. India lags far behind in ports and logistics infrastructure. Against a share of 9 % of railways and 6 % of roads in the GDP the share of ports is only 1 %. Thus, high logistics costs make Indian exports uncompetitive. Therefore Sagarmala project has been envisioned to provide ports and the shipping the rightful place in the Indian economy and to enable port-led development.
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