About the Programme
- The Sagarmala project seeks to develop a string of ports around India’s coast. The objective of this initiative is to promote “Port-led development” along India’s 7500 km long coastline.
- It aims to develop access to new development regions and enhance connectivity with main economic centres and beyond through expansion of rail, inland water, coastal and road services.
- The Union Ministry of Shipping has been appointed as the nodal ministry for this initiative.
- To assist in implementation of the Sagarmala Programme, the Sagarmala Development Company Limited was incorporated in 2016 under the Companies Act, 2013 by the Ministry of Shipping with authorized capital of INR 1000 crore and subscribed capital of INR 90 crore.
- India is located along key international trade routes in the Indian Ocean and has a long coastline of over 7,000 km. Approximately 95% of India’s merchandise trade (by volume) passes through sea ports.
- Yet, capacity constraints and lack of modern facilities at Indian ports tremendously elongates the time taken to ship goods in and out of the country and has held back India’s share in world trade. For example, Turnaround time (TAT) at major ports was approximately 2.5 days in 2018-19, whereas the global average benchmark is 1-2 days.
- In addition to this, last mile connectivity to the ports is one of the major constraints in smooth movement of cargo to/from the hinterland. Around 87% of Indian freight uses either road or rail for transportation of goods. A significant share of this cargo experiences “idle time” during its transit to the ports due to capacity constraints on highways and railway lines connecting ports to production and consumption centers. Although water-borne transport is much safer, cheaper and cleaner, compared to other modes of transportation, it accounts for less than 6% of India’s modal split.
- By comparison, coastal and inland water transportation contribute to 47% of China’s freight modal mix, while in Japan and US, this share is 34% and 12.4% respectively. Significant savings can be achieved by shifting movement of industrial commodities like coal, iron ore, cement and steel to coastal and inland waterways.
Vision of the Sagarmala Programme
- The vision of the programme is to reduce logistics cost for EXIM and domestic trade with minimal infrastructure investment. This includes:
- Reducing cost of transporting domestic cargo through optimizing modal mix
- Lowering logistics cost of bulk commodities by locating future industrial capacities near the coast
- Improving export competitiveness by developing port proximate discrete manufacturing clusters
- Optimizing time/cost of EXIM container movement
- Components of Sagarmala Programme are:
- Port Modernization & New Port Development: De-bottlenecking and capacity expansion of existing ports and development of new greenfield ports;
- Port Connectivity Enhancement: Enhancing the connectivity of the ports to the hinterland, optimizing cost and time of cargo movement through multi-modal logistics solutions including domestic waterways (inland water transport and coastal shipping);
- Port-linked Industrialization: Developing port-proximate industrial clusters and Coastal Economic Zones to reduce logistics cost and time of EXIM and domestic cargo;
- Coastal Community Development: Promoting sustainable development of coastal communities through skill development & livelihood generation activities, fisheries development, coastal tourism etc.
- Coastal Shipping & Inland Waterways Transport: Impetus to move cargo through the sustainable and environment-friendly coastal and inland waterways mode.
Why in News?
- Under the National Perspective Plan of the Sagarmala Programme, fourteen Coastal Economic Zones (CEZ) have been envisaged including three in the state of Tamil Nadu.
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