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With India’s growth story catching global attention, enhancing its shipping and logistics footprint becomes imperative
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This article is part of the essay series: Sagarmanthan Edit 2025.
Connectivity is the linchpin of the contemporary international order, driving strategic partnerships and cooperative economic frameworks, while also defining the sustainability narrative. By enabling the exchange of resources, goods, and services as well as fostering people-to-people contact, connectivity contributes towards establishing productive supply chains, international trade, capital, and data flows. Historically, sea routes have served the colonial powers to transport cheap raw materials from the Global South and disperse manufactured goods in the global market. However, the rise of the developing economies, especially China, has transformed the manufacturing game. Nearshoring avenues in the Asian region, such as India, Thailand, China, Vietnam and Malaysia, have led to the exploration of advanced technologies, alternative financing methods, optimising delivery and performance, etc. The hub of supply chain management has shifted from the North to the South. As per the World Bank, the developing countries are heavily reliant on shipping, accounting for nearly 55 percent of seaborne exports and 61 percent of imports.
By enabling the exchange of resources, goods, and services as well as fostering people-to-people contact, connectivity contributes towards establishing productive supply chains, international trade, capital, and data flows.
As a pivotal hub impacting global trade and logistics management, the maritime industry plays a crucial role. Despite heightened economic contractions owing to the pandemic and the ongoing geopolitical tensions, maritime trade is gradually picking up pace. As per the United Nations Conference on Trade and Development (UNCTAD) 2024, maritime trade grew substantially by 2.4 percent i.e., 12.3 billion tonnes and is estimated to grow further by 2 percent in 2024, maintaining an average of 2.4 percent annually till 2029. In this sense, ports operate as gateways of the future.
Leveraging more than 80 percent of the international, regional, and intra-regional trade flows, ports strongly act as vital nodes of socio-economic development, shaping the countries’ supply chain strategies. Port management and maritime connectivity are essential components for establishing resilient supply chains, sustainable growth and strategic competitiveness. The shipping industry is estimated to transport approximately 11 billion tonnes of goods every year (Figure 1).
Figure 1: Contribution of the shipping industry to global GDP, trade and population (2000-2030)
Source: International Chamber of Shipping
However, owing to the Russia-Ukraine crisis, tensions in the Red Sea and the conflict in the Middle East, global shipping routes have been disrupted, impacting energy supply and food security for a majority of the developing economies. For instance, UNCTAD suggests that in 2024, maritime connectivity of small island developing states (SIDS) has fallen by 9 percent over the last decade, making them 10 times less connected with the rest of the world.
Global South countries, including India, often lack the critical shipping wherewithal, marked by weak infrastructure, fragmented governance, steep logistics costs, regulatory mechanisms coupled with fragile geopolitical circumstances, making them vulnerable and less resilient. Moreover, environmental and climate concerns have a spillover impact on their long-term developmental targets. With India’s growth story catching global attention, enhancing its shipping and logistics footprint becomes imperative.
As a prominent development partner from the Global South, India enjoys a unique maritime position. Nine of its 29 states are coastal, and the nation’s geography includes 1,382 islands. Having a fleet of 1,530 ships, there are nearly 217 ports, including 12 major ports (Table 2), handling approximately 871.52 million tonnes to 1,629.86 million tonnes of cargo between 2014-15 and 2023-24, respectively (Figure 3).
Table 1: List of major and non-major Indian Ports
Source: Government of India, PIB, 2024
Figure 2: Cargo traffic at major Indian ports (in million tonnes)
Source: Government of India, PIB, 2024
India’s Exclusive Economic Zone (EEZ) of over 2 million square kilometres has a wealth of living and non-living resources with significant recoverable resources such as crude oil and natural gas. India’s Maritime Vision 2030 highlights the port infrastructure as central to its growing economy and also to the global shipping architecture. In 2023-24, Indian ports lowered their turnaround time to 22.57 hours, with Paradip Port yielding a revenue of US$ 188 million and Jawaharlal Nehru Port registering a net surplus of US$ 151 million. India plans to raise an investment of US$ 82 billion in port infrastructure by 2035 to leverage its maritime agenda.
India’s shipping sector faces several persistent challenges. These include the lack of modernised port infrastructure, an ageing fleet, high shipbuilding costs, a significant skills gap within the workforce, and limited investments in green and sustainable shipping technologies.
Post-pandemic, employing innovative digital technologies has become a necessity for operating ships. Modernising the sector through energy-efficient designs, shore power, utilising green fuels, blockchain, Internet of Things (IoT), artificial intelligence (AI), and automation holds the key. Under India’s Sagarmala initiative, ‘port modernisation’ is one of the key pillars to “streamline regulatory processes, improve efficiency and reduce costs” for the industry. By collecting real-time data on container and vessel movements, port stakeholders can enhance operational sustainability. This would, in turn, improve India’s global competitiveness in terms of operational efficiency, last-mile connectivity, higher productivity, and enhanced supply chain management in less time. In the meantime, bridging the market gap between industry demands and a skilled workforce is essential for India to keep pace with other global competitors in the maritime sector.
Under India’s Sagarmala initiative, ‘port modernisation’ is one of the key pillars to “streamline regulatory processes, improve efficiency and reduce costs” for the industry.
Sustainability also entails creating smart and ‘intelligent’ ports embedded in a robust digital infrastructure consisting of skilled and hands-on professionals. Compared to global standards, India faces a significant skills gap, especially in high-tech and specialised terminal management. Given the complexities involved in port operations driven massively by technologies, India must focus on building a pipeline of skilled workforce in handling container logistics, vessel traffic and integrating advanced technologies like Smart Ports Infrastructure Management Systems (SPIMS), AI, IoT, blockchain, etc. to build real-world competence.
With environmental concerns of reducing carbon emissions gripping the shipping industry, India is attempting to align its maritime goals with the broader sustainability narrative. Following the International Maritime Organisation (IMO) net-zero regulations for global shipping to be formally adopted in October 2025, a new fuel standard for ships and a global pricing mechanism for emissions has been recommended to support a just transition. However, this implies structural changes of ships, mega ports, and shipyards, as well as increasing the operational costs for the industry. As per the Directorate General of Shipping (DGS), housed under the Ministry of Ports, Shipping and Waterways, India’s compliance with IMO regulations could cost around US$ 8-10 million annually by 2030, which means a 14 percent increase in fuel costs and 5 percent surge in freight rates. A concerted effort involving all the stakeholders is essential to prepare a green finance roadmap for India’s shipping ambitions. While offering transparent regulatory mechanisms, India also needs to consider extending tax breaks and retrofitting incentives to encourage public-private partnerships. Despite the Union Budget 2024-25 announcing the Maritime Development Fund (MDF) with a corpus of INR 25,000 crore, it falls short in addressing the tax disparities faced by the shipping companies. India’s shipping industry encounters issues with importing costly raw material from foreign countries, high labour costs, steep taxes levied by the government, administrative delays in land acquisition and coastal regulation zone compliance, and a lack of availability of feasible financing avenues (loans, debt, equity) to modernise infrastructure.
Consolidating India’s maritime capacities is crucial for bolstering trade resilience, fostering economic growth, and furthering the sustainability agenda in the future. By reforming its port management, incentivising the private sector, and fostering innovative financing pathways, India can turn the tide to become one of the prominent maritime partners in the Global South.
Swati Prabhu is an Associate Fellow at the Centre for New Economic Diplomacy, Observer Research Foundation.
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Dr Swati Prabhu is a Fellow with the Centre for New Economic Diplomacy at Observer Research Foundation. Her research explores the idea of aid, role of ...
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