Despite having an extensive network of inland waterways in the form of rivers, canals, backwaters and creeks freight transportation by waterways is highly under-utilized. Waterways currently contribute around 6% to India's transportation modal mix, which is significantly less than that in developed economies and some of the developing economies as well.
It is estimated that coastal shipping traffic of about 250 MMTPA can be achieved from current and planned capacities across coal, cement, iron and steel, food grains, fertilizers, POL by 2025. Additionally about 125 MMTPA of cargo is expected to be moved via inland waterways by 2025.
Availability of dedicated infrastructure will go a long way in promoting coastal shipping as a mode of freight transportation. Hence infrastructure at ports and supporting infrastructure using rail/road and waterways to facilitate coastal movement are being created. These include development of dedicated coastal berths, bunkering and storage at ports and creation of supporting hinterland transport infrastructure with last mile connectivity
To realize the potential, Ministry of Shipping has been focusing on improving the coastal Shipping and Inland Waterways Transport which is an environment friendly mode of transport.
Government of India has undertaken various initiatives to promote coastal shipping such as
- Relaxation in licensing for foreign flag vessels to transport fertilizers, agricultural products and EXIM containers for trans-shipment in India on coastal routes under section 406 and 407 of the Merchant Shipping Act
- Licensing Relaxation for special vessel such as RO-RO, RO-pax, ODC etc has been extended till 2020.
- Priority berthing policy for coastal vessels has been notified to reduce turnaround time for coastal vessels and improve their utilization
- A discount of minimum 40% is offered by major ports on vessel and cargo related charges to vessels carrying coastal cargo. For the case of Ro-Ro car carriers, this discount is extended to the tune of 80%.
- GST Reduced on Bunker Fuel from 18% to 5%
- Grant-in-aid assistance to develop berths and associated infrastructure including dredging, Break-water creation, mechanization under the coastal berth scheme has been extended till 2020
Pursuant to the above, India has witnessed a steady growth of 11.3% of cargo movement on coastal routes from 2015-16 to 2018-19.
In 2018-19, it had handled 120 MTPA of coastal cargo in comparison to 94.5 MTPA in 2016-17 and is expected to reach 250 MTPA by 2025
In order to unleash the optimal potential of the sector, MoS has undertaken a perspective plan on coastal shipping in association with Asian Development Bank in July 2019 that will form the basis of infrastructure development over the next decade.
Recent Initiatives
CONCOR is a Navratna company under the Ministry of Railways and is a container transporter on road, rail and coastal routes. It currently operates its own terminals across India at 82 different locations.
CONCOR had started movement of FCI consignment through the coastal route and is willing to extend its logistics support in transporting of cargo to various North-Eastern States through the use of inland waterways. CONCOR intends to connect the last mile connectivity through road cum rail modes thereby making a consolidated cargo movement and yet competitive one.
FCI dispatched 37.5 MMT of food grains (rice and wheat) all over India in FY 18, of which 30 MMT was dispatched to coastal / NW-1 states and north-eastern states. FCI started a pilot movement thorugh coastal route in FY 16 – 17 where it handled 20000 MT of cargo. In this FY 19-20, FCI has dispatched 53,000 MT of foodgrains via the coastal shipping mode
Recently CONCOR ventured into coastal movement of cargo by deploying 2 coastal vessels exclusively for cargo movement booked through CONCOR. The coastal vessels are at present sailing between Kandla and Tuticorin port with stoppages at Mangalore and Kochi Port. Besides, containers the vessel can carry bulk and break bulk cargoes also. CONCOR is planning to extend coastal cargo movement to all ports in India
During FY17-18, 1.26 lakh tons and 3 lakh tons in FY18-19 has been moved through coastal shipping by IFFCO