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India Sets Sail Towards Maritime Prowess with New Vadhavan Port

 In a significant move towards bolstering India's maritime infrastructure, the Union Cabinet has given the green light for the establishment of a major port at Vadhavan, located near Dahanu in Maharashtra. This ambitious project will be spearheaded by Vadhavan Port Project Limited (VPPL), a special purpose vehicle (SPV) formed in collaboration between the Jawaharlal Nehru Port Authority (JNPA) and the Maharashtra Maritime Board (MMB), holding stakes of 74% and 26% respectively.

The Vadhavan port is set to be an all-weather greenfield deep draft major port, strategically located in Palghar District, Maharashtra. The total investment for this transformative project, including land acquisition, is pegged at ₹76,220 crore. The port’s impressive design includes nine container terminals, four multipurpose berths, liquid cargo berths, a Ro-Ro berth, and a berth for the Coast Guard, according to a release from PIB.

Ports are critical to a nation's manufacturing and export capabilities. While China boasts seven of the world's ten busiest container ports, India is making strides to improve its position, currently at 35 on the World Shipping Council’s list. The Vadhavan port project aims to catapult India’s maritime capabilities, aligning with the country’s aspirations of becoming a global manufacturing hub.


Independent trade professional Manasvi Srivastava emphasizes the importance of expanding India’s shipping capacity, stating, "This would align with India's aspirations of being a manufacturing hub as well as partaking of the growing maritime cargo traffic. Investment in ports catering to container traffic needs to be prioritized over bulk cargo as very soon climate change imperatives will drive down the demand for bulk cargo handling of fossil fuels. As Vadhavan port is expected to be primarily meant for container handling, it would fit well into such a future for shipping."


 Srivastava also highlights the need for environmentally conscious development, noting that, "This is especially true for Dahanu, the location of Vadhavan port. In fact, such new projects offer the opportunity of embedding green technologies in the port sector, including energy generation from solar, wind, water and such non-carbon resources. Using this opportunity constructively could benefit manufacturing, logistics as well as greening of the economy."


The Vadhavan port, to be developed through a public-private partnership, is projected to handle 15 million TEUs by 2035 and 24 million TEUs by 2040. The port's natural draft of 20 meters will allow it to accommodate large container vessels, up to 20,000 TEUs, directly from international waters, thereby reducing dependency on transshipment hubs like Singapore and Colombo.


 Union Minister of Ports, Shipping & Waterways, Sarbananda Sonowal, has underscored the importance of modern port infrastructure for efficient trade. India’s major ports collectively handled 795 million tonnes of cargo last year, marking a 10.4% growth. Sonowal emphasized, “95% of India's trading by volume and 70% by value is done through maritime transportation.”


The senior government official highlighted that larger vessels' increasing parcel sizes necessitate deeper ports. Vadhavan port, with its significant draft depth, will enable direct docking of large international vessels, enhancing trade efficiency and reducing logistics costs. This development is crucial as India's economy, projected to grow at 7.6% or higher, demands increased cargo handling capacities.


 With the Vadhavan port, India is set to enhance its port infrastructure, supporting its vision of becoming a developed nation by 2047. The Economic Survey 2022-23 identified logistics costs as a significant challenge, ranging from 14-18% of GDP. The new port project aims to streamline trade and transport infrastructure, potentially reducing these costs and improving efficiency.


Sameer Bhatnagar, Partner and Global Head of Ports (Maritime) at KPMG India, remarked, “Vadhavan port will create a kind of scale which will be fairly large in terms of its handling capacity.” He added that India needs more deep draft ports capable of handling next-generation vessels, which can significantly reduce shipping costs and improve logistics efficiency.


 The Vadhavan port project represents a monumental step towards enhancing India’s maritime infrastructure, poised to transform the country's economic landscape. By focusing on capacity expansion, environmental sustainability, and cost efficiency, India is charting a course towards becoming a formidable player in global trade, promising widespread benefits for its economy and the wider logistics ecosystem.

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