Ports are a form of infrastructure which play a crucial role in facilitating international trade and also act as fulcrums of economic activity in their surroundings and hinterland. They provide an interface between the ocean transport and land-based transport. India has an extensive coastline of 7517 km (excluding Andaman and Nicobar Islands) spreading over 13 States/ UTs and studded with 12 major ports
and 187 minor/intermediate ports
(non-major ports) across 9 coastal States. The 12 major ports are Chennai, Cochin, Ennore, Jawaharlal Nehru Port Trust (JNPT), Kandla, Kolkatta, Mormugao, Mumbai, New Mangalore, Paradip, Tuticorin and Vishakhapatnam. These ports serve as the gateways to India's international trade by sea, handling over 90% of foreign trade. There has been a phenomenal growth in the cargo handled at the ports, which has increased from 19.38 million tonnes (major ports) in 1950-51 to around 575 million tonnes (major and non-major ports) by 2005-06.
Under the Indian Constitution, ports are in the concurrent list, such that, the major ports are under the jurisdiction of the Union Government, while non-major ports are controlled by the respective State Governments. At the Central level, the Department of Shipping, in the Ministry of Shipping, Road Transport & Highways, has been entrusted with the responsibility to formulate and implement policies and programmes on shipping and port sectors. For instance, the 'National Maritime Development Programme' was announced with the aim of upgrading and modernising the maritime infrastructure in India by facilitating focused and accelerated investment in specific infrastructure including port infrastructure, tonnage acquisition and institutional capacity building. Total investment envisaged in the programme is Rs. 1,00,339 crores out of which Rs. 55,804 crores is for major ports. A total of 276 projects relating to ports sector have been identified under the programme for implementation by 2011-12.
Initially, investment in the transport sector, particularly in the ports, was made by the States because of the requirement of large volume of resources; long gestation periods; uncertain returns and various externalities, both positive and negative, associated with the infrastructure. However, with liberalization, Government has opened up its major ports for private sector participation in order to mobilize the resources; improve efficiency, productivity and quality of services; and bring competitiveness in port services. The major areas which have been thrown open for private investment include construction of dry-docks, ship- repair facilities, etc. Also, foreign direct investment upto 100% under automatic route is permitted for construction and maintenance of ports and harbours. Hence, there exist several opportunities for encouraging investment into the sector.
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