Indian port industry to grow 4-7 pc over next 5 years, supported by rising imports, declining freight costs: Report

NEW DELHI: Indian port industry will grow at the rate of 4-7 per cent over the next five years, supported by rising imports, a decline in freight costs, and the normalization of global supply chains, according to a report by Motilal Oswal.

As per the report, the cargo traffic is expected to grow at a steady annual rate of 3-6 per cent, with utilization rates stabilising at approximately 55 per cent over the medium term.

Transshipment, which currently accounts for about 25 per cent of India’s container throughput, remains a critical segment, with key ports like Chennai playing a pivotal role in facilitating this segment.

According to the report, between the Financial Year (FY) 2023 and FY28, India’s ports are expected to increase their capacity by 500-550 MTPA annually, driven by continued growth in petroleum, oil, and lubricants (POL) handling, as well as coal and containerised cargo.

The report added that the growth of ports will be driven by an increase in the handling of petroleum, oil, lubricants (POL), coal, and containerised cargo.

India’s ports currently manage 95 per cent of the country’s export volumes and 70 per cent of its export values, showcasing the sector’s critical role in facilitating trade.

With a coastline stretching approximately 7,500 km and 20,275 km of national waterways across 24 states, India’s ports benefit from a strategic location in the Indian Ocean. This positioning is aligned with 80 per cent of the global maritime oil trade, which enhances the country’s potential to become a dominant player in the maritime sector.

The Indian ports infrastructure includes 13 major ports and 205 non-major ports.In FY24, major ports handled 819 MMT of cargo, and in the period from April 2024 to January 2025, this number stood at 699 MMT. Overall, the sector operates with a capacity of 2,604 MTPA, but this is expected to expand significantly in the coming years, the report added.

The report also highlights the distinct roles that major and non-major ports play in India’s port ecosystem.

Major ports, which are managed by the central government, are primarily located near industrial hubs and handle a wide range of cargo types based on regional demands.

In FY23, non-major ports saw a 7.6 per cent increase in cargo traffic, outperforming the 4.7 per cent growth observed at major ports.The report adds that both major and non-major ports will play crucial roles in driving the overall development of the sector.

The growth in cargo traffic, along with improvements in port infrastructure and operations, positions India’s ports to remain a key enabler of trade and economic growth for years to come, the report adds. (ANI)