New Delhi: India can save up to USD 28 billion in infrastructure spend and another USD 3.3 billion in transportation cost if 50 per cent of overall trade moves closer to ports by 2020, an EY report said today.
With initiatives like Sagarmala, "it is estimated that India can save up to USD 28 billion in infrastructure investment and another USD 3.3 billion in transportation cost if 50 per cent of overall trade moves closer to ports by 2020," as per the research report by EY.
The report said non-major ports on the east-coast of the country could play a major role in leading the sustainable growth path for the maritime trade.
"Non-major ports emerging to constitute a whopping 43 per cent of total traffic in FY16...reflects a huge shift in trade over a period of 10 years with the latter emerging as better choices compared to major ports on the back of strategic location, modernization, efficiency and better infrastructure, while achieving cost competitiveness through optimisation of network and logistics," the report said.
It said global trade increased at a CAGR of 6.9 per cent in value terms during 1990 2015, and sea borne trade constitutes 80 per cent of the global trade by volume.
"In the Indian context, traffic handled at ports has increased at CAGR of 7.4 per cent during 1981-2016 in line with global trade growth. During the same period, trade in value terms increased from USD 24 billion to USD 643 billion," the report said.
In the past decade, India's trade with countries to its east has been expanding. China has emerged as a dominant partner constituting 7.9 per cent of imports and 1.8 per cent of exports in 2015, it said.
It also said that with increasing traffic, congestion at major ports is increasing. Some of the major ports have land constraints limiting their ability to expand as well as promote port based industrial zone.
On the other hand the study claims that non major ports have much bigger land banks and have better infrastructure. For example, Mundra port and SEZ on the west coast is spread over 23,000 acres whereas Krishnapatnam port on the east coast has a land bank of approximately 6,800 acres for the primary port area and another 13,000 acres earmarked for industrial development. It said these ports also have drafts in excess of 18 meter on par with international standards.
Emergence of industrial clusters near the port, consolidations of distribution centres and warehouses post GST and directional distributional of cargo can address the infrastructural bottlenecks and can reduce the average in-land logistics cost by as much as 68 per cent, it added.
