Published on 23 Feb 2025
Coastal shipping in India offers a significant opportunity to reduce logistics costs, improve efficiency, and minimize environmental impact. With a vast coastline of over 7,500 kms, India has a substantial potential for developing this mode of transportation.
Challenges faced by coastal shipping in India
Inadequate Infrastructure: India's coastal infrastructure, including limited dedicated berths and cargo handling equipment, hampers efficient coastal shipping operations.
High Logistics Costs: Port charges, demurrage, and fuel costs, often 20-30% higher than global averages, increase operational expenses for coastal shipping.
Regulatory Hurdles: Complex customs and port clearance procedures, with clearance times significantly exceeding global benchmarks, hinder smooth operations as per World Bank reports.
Weather Risks: India's monsoon season and cyclones disrupt coastal shipping, leading to significant losses amounting to INR 10,000 crore in 2021-22 as per Indian Register of Shipping.
Vessel Shortage: The limited availability of deep-draft vessels restricts cargo capacity and reduces competitiveness, as noted by the National Shipping Board.
Weak Intermodal Connectivity: Inefficient connections between ports and inland transportation hinder cargo movement.
Example: A study by the IIM Calcutta found that only 20% of cargo transported by coastal shipping is further moved by rail, indicating a significant gap in intermodal connectivity.
Opportunities of coastal shipping for India
Reduction in Logistics Costs: By shifting bulk cargo from road and rail to coastal shipping, businesses can significantly reduce transportation costs, fewer tolls, and reduced wear and tear on vehicles.
Example: Moving iron ore from Odisha's mines to steel plants in Gujarat via coastal shipping has significantly reduced transportation costs for steel producers.
Decongestion of Road and Rail Network: Coastal shipping can alleviate pressure on the overburdened road and rail networks, reducing traffic congestion, accidents, and travel time for both passengers and cargo.
Environmental Benefits: Coastal shipping emits significantly lower greenhouse gases compared to road and rail transport, contributing to India's sustainability goals and improving air quality.
Boost to Port Infrastructure: Increased coastal shipping activity can lead to the development and modernization of port infrastructure, creating jobs and stimulating economic growth in coastal regions.
Example: The development of major ports like Jawaharlal Nehru Port Trust (JNPT) and Chennai Port under the Sagarmala initiative has enhanced cargo and job opportunities.
Development of Coastal Tourism: Coastal shipping can be integrated with tourism by offering passenger services, connecting coastal destinations, and promoting cruise tourism.
Example: Coastal cruises connecting Mumbai, Goa, and Kochi have attracted tourists, boosting local economies and creating employment in the tourism sector.
Promotion of Regional Development: By improving connectivity between coastal and inland regions, coastal shipping can facilitate the movement of goods and people.
Example: Transporting agricultural produce from Kerala to markets in Mumbai and other coastal cities via sea has improved farmers' incomes and promoted regional economic growth.
Geography
Coastal Shipping
Challenges faced by coastal shipping in India
Opportunities of coastal shipping for India
General Studies Paper 1