Answer:

India's 7,500-km coastline with 13 major ports and its strategic location on world trade routes gives it a natural advantage to control and direct shipments. Yet, India has not managed to get a dominant grip on shipping, even in its own continent.

Challenges to the shipping industry:

♤ Rigid laws and a detached financial impetus.

♤ The unfriendly taxation structure, wherein the domestic shipping operators need to pay high taxes.

♤ The turnaround time at ports in India is one of the biggest handicaps.

♤ Inadequate infrastructure and the inability of the Indian ports to meet the rising demand in container traffic. This takes us to the next major problem of ineffective port facilities.

Though, the Indian Ports are the gateways to international trade, as they handle over 90% of foreign trade by volume. However, the existing port infrastructure is insufficient to handle trade flows effectively.

Challenges to the port facilities:

♤ The current capacity at major ports is overstretched, as 13 major Indian ports handle 56.7 percent of the all-India port throughput.

♤ The handling capacity of ports in India has remained limited, while the demand has been rising, resulting in port congestion.

♤ Several major ports lack sufficient draft for large crude tankers. Large vessels are berthed at Colombo, Singapore, or Dubai, and cargo is shipped to India later in smaller vessels, thereby escalating the freight cost.

♤ Weak hinterland connectivity reduces accessibility.

♤ Labor and equipment productivity levels are still very low due to the outdated equipment, poor training, low equipment handling levels by labor etc.

Some of the initiatives are:

♤ Sagar Mala project: It seeks to create a string of ports around India's coastline to safeguard maritime interests. It would give a boost to the shipping industry by evolving a model of port led development. It also aims to integrate the development of the ports, the industrial clusters and hinterland, and efficient evacuation system through rail, road, inland and coastal waterways resulting ports becoming the drivers of economic activity in the coastal areas.

♤ The government also signed a memorandum of understanding with Iran to develop the Chabahar port.

♤ The government prioritized the expansion and modernization of ports as part of its five-year plan initiatives in 2007. It has been instrumental in redefining the role of ports from mere trade gateways to integral parts of the global and logistics chain.

♤ Several projects are underway for the deepening of drafts at major ports as a part of the national maritime development program. For example, the Sethusamudram Shipping Canal Project.

♤ The Port sector has been thrown open to private sector participation for the provision of port facilities at various major ports.

The commissioning of power projects based on imported coal and the setting up of steel projects and offshore exploration and production projects are likely to drive the Indian ports sector in the near future.