Eye on China, India doubles down on container hub ports

New Delhi, July 28

An Indian conglomerate has started building the country’s first trans-shipment port, conceived 25 years ago, and the government will construct another $4-billion facility nearby to create a shipping hub rivaling Chinese facilities in the region.

New Delhi will grant billionaire Gautam Adani 16 billion rupees ($240 million) so-called “viability gap” funding to help the new port at Vizhinjam, on India’s southern tip, win business from established hubs elsewhere in Asia.

Once Vizhinjam, in the state of Kerala, is operational the federal government will start building the port of Enayam in neighbouring Tamil Nadu, said a senior shipping ministry official. Enayam alone will save more than $200 million in costs for Indian companies every year, he said.

India’s 7,500-km coastline juts into one of the world’s main shipping routes and Prime Minister Narendra Modi wants to capitalise on that proximity by developing ports that can shift freight on to huge vessels capable of carrying up to 18,000 20-foot containers.

By bringing onshore cargo handling now done at entrepots in Sri Lanka, Dubai and Singapore, Modi’s government expects cargo traffic at its ports to jump by two-thirds by 2021 as India ramps up exports of goods including cars and other machinery.

The lack of an Indian domestic trans-shipment port forces inbound and outbound containers to take a detour to one of those regional hubs before heading to their final destination. Reuters