Updated on May 06, 2025 02:36:56 PM
Ports are the only means to enable bilateral trade between two or more countries. These are locations along navigable water with facilities for loading and unloading goods or passengers from commercial vessels. It supports supply chains, efficient cargo handling, and provides an interface to enable trade; these are the basic functions played by the ports and shipping industry.
India is ideally placed on the world's shipping routes, with a coastline of around 7,517 kilometers. India possesses a global market share of over 30% in the ship breaking sector as of 2021. The government of India has also implemented a number of fiscal and non-fiscal incentives for businesses that build, maintain, and run ports, inland waterways, and shipyards in the country in an effort to boost the country's shipping and port industries.
Over 150 initiatives have been identified by the Maritime India Vision 2030 to strengthen the Indian maritime industry. In March 2021, the Honorable Prime Minister of India unveiled Vision 2030. It was created following extensive consultation with more than 350 public and private individuals, including associations and trade bodies, inland waterways, ports, shipyards, and legal professionals. With over 150 programs addressing every aspect of the Indian maritime industry, the vision provides a roadmap for the rapid and well-coordinated growth of the nation's diversified marine sector.
The cargo traffic at Indian ports is 1129.93 Mn Tonnes in FY 2022-2023 with the growth rate in the cargo handled by major ports. The cargo handling capacity of all major ports stood at 1,617 MTPA last year. 95% of India's trade by volume and 70% of its trade by value is accounted for by the maritime sector.
Sagar Mala and Maritime India Vision share a common goal of creating employment, with a target of 2 million direct and indirect jobs by 2030, and of unleashing more potential, such as an annual revenue of $2.7 billion from current assets.
Growing investment and cargo volume suggest that the Indian ports industry has a bright future. These investments help providers of marine assets like barges and dredgers as well as services like operation and maintenance (O&M), pilotage, and harboring.
To participate in FDI in the ports and shipping sector for expanding collaboration with foreign countries to envisage transformation in dometic upbringing, the applicants are required to register under the Foreign Investment Facilitation Portal (FIFP). The procedure might be puzzling for any newcomer applicant since it incorporates several terms and conditions without rendering direct access to portals that can generate approvals for FDI.
Table of Content
Following are the objectives of FDI in ports and shipping sector:
100℅ FDI is allowed under FDI in ports and shipping industry through an automatic route.
Many documents are required for FDI in the ports and shipping industry which are as follows:
Following are the procedures which required at the time of FDI in the ports and shipping sector:
Applicants must fill out the online application form along with the relevant documents for making out the proposal for Foreign Direct Investment
Filing the proposal for FDI online within two working days, DIPP then will address the concerned administrative ministry to transfer the proposal of applicants electronically
Collect all the requisite documents for continuing the process of the investment proposal. In case documents may be found incorrect, applicants will be held responsible in case of any deviation found.
The DIPP along with potential authorities will process the application internally and recognize various ministries for adding several comments such as the Ministry of Home Affairs, Reserve Bank of India, Ministry of External Affairs, Ministry Of Finances, etc.
There are conditions tapping for the procedure of FDI approval which must be understood by investors.
Following are the key advantages for investors when they poses to invest in ports and shipping industry:
Following are the benefits of FDI in ports and shipping industry:
FDI in ports and shipping industry allowing developing countries to update infrastructure, gain knowledge, and generate jobs. Foreign investors profit from expanding into new markets. However, careful management is required to maintain environmental sustainability while also addressing security issues. Overall, FDI may be a major driver of growth in the marine industry, but a balanced strategy is required.
Several other factors to consider for investors while investing in ports and shipping industry are listed below:
Investors must also need to check eligibility criteria for buying investment in India in sectoral companies.
At Professional Utilities, we leverage our industry knowledge and expertise to help businesses navigate complex regulations, minimize risks, and optimize operations for maximum efficiency and profitability.
Frequently Asked Questions
Yes, financial support is provided for specific sectors, such as shipbuilding. The government has also provided customs and excise duty concessions for shipbuilding inputs. Tax breaks for infrastructure projects, including ports and inland waterways, are given for ten consecutive assessment years. This may undergo procedural changes with the implementation of GST.
The government of India has begun massive attempts to develop and strengthen the country's ports and shipping, including enabling regulatory measures to encourage private investment in the industry. Some of the key initiatives include the Sagarmala Project, dredging and navigation for 111 inland waterways, financial assistance for shipbuilding in India, promotion of cruise shipping and cruise terminals in India, incentives for coastal shipping, and the establishment of 13 Coastal Economic Zones along India's coastline.
Yes, Viability Gap Fund
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