BUSINESS SESSION ONE: OPPORTUNITIES IN THE NEIGHBOURHOOD

The first business session saw industry leaders discuss trade opportunities between India and neighbouring countries and the capacity expansion initiatives triggered to facilitate trade. To start with, Arun Kumar Gupta, MD, India Ports Global Pvt Ltd gave an overview of what India is looking at in Iran, Myanmar, Bangladesh, Sri Lanka and Africa. “Especially when China is aggressively investing in these countries, India needs to keep a check on it,” he emphasised.

China is all around in the Indian Ocean with a big presence in Sri Lanka, investing $361 million in Phase 1 development of Hambantota Port, and Phase II of the project is in progress with an investment of $750 million. Sri Lanka is also preparing for development of east container terminal in Colombo, which is an opportunity for the private terminal operators in India to put their foot in, he pointed out.

Moving to Myanmar he said, a new initiative is in progress to connect Mizoram via Myanmar. Cargo can be moved from Kolkata, Haldia to Sittwe Port and to Mizoram.

Coming to Bangladesh, Arun Kumar Gupta highlighted the opportunities there: Lots of power plants are coming up in Bangladesh, fuelling demand for coal. Chittagong is the only major port handling 92 per cent of the country’s trade and so Bangladesh has an urgent need to develop a deep sea port and they are focusing on Payra Port. India is looking at participating in a multipurpose terminal and a dry bulk terminal at Payra.

Commenting on India’s involvement in Iran he said, “Chabahar could be developed into an alternate route to CIS countries, which I can call the eastern corridor. India’s main objective in investing in Chabahar is a strategic one as China has been investing in Gwadar Port and Afghanistan should not be dependent only on Gwadar Port.” Iran, Pakistan and Afghanistan borders meet at Zaidan in Iran. India has already developed a road linking Chabahar, Zaidan to Afghanistan. The viability of the Chabahar Port depends on the cargo being imported by Afghanistan, EXIM of Iran and the transit cargo to CIS countries.

India will operate the Chabahar Port for 10 years and the commercial operations will start in another 18 to 24 months. The jetties are almost ready, India will have a container terminal, a multipurpose terminal and a total backup area of 70 hectares. India Ports Global is looking for partners to form an SPV to operate the port.

Towards the end of his talk, Arun Kumar Gupta discussed Africa. India is developing Nacala Port in Mozambique that has huge deposits of thermal and coking coal. Currently, most of the coal is being exported from Bera Port, but the logistics infrastructure is inefficient. There is a coal terminal at Nacala which has a deep draft of 22 metres allowing cape size vessels to come in. This is a potential opportunity for India as apart from Mozambique there are other mineral rich countries like Zimbabwe and Zambia.

Capt Vivek Anand, President, MANSA, took an overview of where India stands in the global scenario and drove the discussion into the hinterlands of the country. Presenting a glimpse of the growth trajectory of India he said that in the next two decades India will be the most populous country in the world of which the young generation forms a larger share and this is going to drive the growth in consumption. Global ocean trade is 10 billion metric tonnes of which India’s trade alone is one billion metric tonnes. World GDP is $77 trillion, of which Indian economy is about $2.8 trillion and in the next decade India will be a $17 trillion economy.

Coming to the hinterland, Capt. Anand said, “Logistics infrastructure is very critical for any economy to grow and the Indian government has very well recognised this and the spending in this sector has grown multiple times.” The government has allocated $1 trillion towards infrastructure development that will support cargo movement forecasted to increase three-fold in the next 10 years. Need of the hour is a master plan for the development of ports and terminals.

Our transport is over dependent on road sector, which is growing by a meagre 17 per cent. Rail and waterways are a cheaper option but they need to be made more efficient. The railways run 7,000 freight trains but growth of railway sector is only 3.5 per cent. So, to expedite development of infrastructure the game changers will be the DFC, especially DMIDC and the quadrilateral of the north-south-east west roadways. GST will bring down the logistics cost by 5 per cent, but it again depends on the quantum of GST, if it is sub 20 per cent then it is OK.

“The most important thing is sufficient cargo volumes as it the one that brings ships to a port. Otherwise infrastructure will be of no use,” said Vinita Venkatesh, Director, Krishnapatnam Port Container Terminal. There are plenty of ports on the east coast but every port is not able to service every customer as statutory approvals are not in place. There needs to be a proper system in the form of a package for granting approvals rather than the government giving on a case to case basis, she said.

Hinting on the need for involvement of trade associations in government initiatives Vinita said, the coastal shipping between India and Bangladesh could not continue as the shipping agreement allows only bilateral trade and does not allow third country cargo to be loaded onto the ship. If this is allowed then the cargo going from Bangladesh to Colombo or Singapore can come to Krishnapatnam and get exported to its destination. When government takes such initiatives they should also involve the industry associations so that such gaps can be bridged.

A successful initiative has been the container train connecting ICD whitefield to Krishnapatnam, following which another train connecting ICD Sanathnagar to the port is being planned. Towards conclusion, Vinita hinted at the need for transforming India into a trading hub like Dubai, which imports and re-exports cargo. This will utilise the excess capacity created at the east coast.

Ahamedul Karim Chowdhury, Terminal Manager, Chittagong Port Authority, briefed on the EXIM trade of Bangladesh. India is the second largest exporter to Bangladesh. If Indian east coast ports connect to Pangaon terminal directly, it will drastically reduce the cost of trade as most of the industrial cities are located close to Pangaon. But, success of short sea shipping between India and Bangladesh depends on the availability of return cargo. Ahamedul Karim Chowdhury concluded with a message for the Indian business community to use the ports on the east coast and promote coastal shipping to Bangladesh.

“We want to be the Singapore for this region by 2030 and this is no secret,” said Rohan Masakorala, CEO, Shipper’s Academy Colombo, the last speaker of the session. Now the island nation wants to move beyond transshipment and become a logistics hub, for which they are developing a master ports strategy. Sri Lanka is creating additional ports at Hambantota in collaboration with China to meet the growing traffic. Trincomalee Port is being developed in collaboration with Singapore. Hambantota will tap Industrial, bunkering and Ro-Ro business. Rohan in his speech explained various mega plans that Sri Lanka is implementing to promote the nation as a trade hub. Various regulatory changes are being made in this regard like no tax regime, no exchange control regime and Customs involvement.