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2009 4th Global Shipping Summit
International Logistics Connection Conference
“Splitting, Discovering, Consolidating”
“A Fast Emerging Market in India –
Development of Eastern Seaboard”.
Capt. Sriram Ravi Chander
Chief Operating Officer
Visakha Container Terminal Pvt Ltd
India Foreign Trade Policy 2009-14
• The long term policy objective for the Government is to double India‟s share in
global trade by 2020.
• By 2011, India has set a policy objective of achieving an annual export growth of
15% with an annual export target of US$ 200 billion and by 2014. double India‟s
exports of goods and services
• Focus Market Scheme & Focus Product Scheme - 26 new markets have been
added under focus market scheme. These include 16 new markets in Latin
America and 10 in Asia – Oceania. A large number of products included in the
Focus Product Scheme.
• Enhanced market access - Comprehensive Economic Partnership Agreement
with South Korea, The Trade in Goods Agreement with ASEAN and the
Mercosur Preferential Trade Agreement with Latin American countries
World Economic Growth Prospects
GDP(annual growth rate%)
8 7.3
6 6
6 5.4
4.7
4 3.1
2.5
1.5
2 0.8 0.6
0
2008 2009 2010
-2 -1.4
-4
-3.8
-6
World Advanced economies Developing economies India
Source IMF
The Emerging Economies
• „E7‟ emerging economies: the BRIC economies of
Brazil, Russia, India and China, plus Mexico,
Indonesia and Turkey.
• By 2050, the E7 emerging economies will be around
50% larger than the current G7 (US, Japan, Germany,
UK, France, Italy and Canada)
• China is expected to overtake the US as the largest
economy in around 2025
• The projected list of fastest growing economies to 2050 is headed by Vietnam, and the top 10 includes
Nigeria, Philippines, Egypt and Bangladesh
India has the potential to catch up with the US by 2050
Sources: Price Waterhouse Coopers, Goldman Sachs, The Times of India
Defying the Slowdown
• India continued to grow even during slowdown
• Emerging economies recovered faster than the developed
economies
• As the global economy recovers India and China will lead the
expansion and will grow at rates of 5.4 and 8.5 % respectively.
• Boosted by large policy stimulus that is increasing demand from
domestic sources and a turn in the global manufacturing cycle,
the two Asian giants are leading the rebound in emerging and
other developing economies
Source World Bank
Defying the Slowdown
• Despite slowdown, India ranked among top five investor‟s destination for the next two years
according to UNCTAD
• India to attract major investments in Power Projects, Highway Projects, Petroleum, Telecom,
Auto and Chemical sectors
FDI inflows USD million
40000
35000
30000
25000
20000
15000
10000
5000
Financial Year : April - March
0
2006-07 2007-08 2008-09
Source RBI
India Trade Agreements
• Free Trade Agreement (FTA)
– Srilanka
– Thailand
– ASEAN
– EU (under negotiation)
– Switzerland (under negotiation)
– New Zealand (under negotiation)
• Trade Agreements
– Bangladesh
– Bhutan
– Maldives
– China
– Japan
– Mongolia
• Trade Treaty
– Nepal
– Comprehensive Economic Partnership Agreement (CEPA) - South Korea
– Singapore
India Trade Agreements
• Framework Agreement
– GCC states i.e. The Member States of the Cooperation Council for the
Arab States of the Gulf.
– ASEAN i.e. The Association of South East Asian Nations.
– Chile.
• Regional Agreement
– South Asia Free Trade Agreement (SAFTA) with Pakistan, Nepal, Sri
Lanka, Bangladesh, Bhutan and the Maldives.
• Preferential Trade Agreement (PTA)
– Afghanistan
– Chile
– MERCOSUR - It is a trading bloc in Latin America comprising Brazil,
Argentina, Uruguay and Paraguay. It has Chile and Bolivia as its
associate members.
„Look East‟
• In a major success in its `Look East' policy, India has
signed a Free Trade Agreement (FTA) with the 10-
member Association of South East Asian Nation
(ASEAN) bloc that would eventually eliminate duty on
80% of the goods traded at present.
• The two sides have set an ambitious target of achieving
an increase of $50 billion worth of trade in the first year
after the agreement comes into force from January
2010.
• Indian exporters of Machinery and machine parts, Steel
and steel products, agriculture products such as Oilcake,
Wheat and Buffalo Meat, Auto Components, Chemicals
and Synthetic Textiles would gain additional market
access as a result of tariff liberalisation by ASEAN.
ASEAN member countries: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore,
Thailand, Vietnam
„Look East‟
• India and South Korea has signed the Comprehensive
Economic Partnership Agreement (CEPA)
• The pact expected to boost bi-lateral trade by $ 3.3 billion
annually
• Tariffs on South Korea auto parts are to be reduced to one
percent over a period of eight years from the current average of
12.5 %
The „Dragon-Elephant Tango‟
• India – China trade to cross $60 billion this year
• By 2013-14 expected to cross $100 billion
The „Dragon-Elephant Tango‟
• India and China – Billion plus
population. Together accounting for
35% of world population
• 300 years ago – India & China formed
50% of world GDP
• Today it stands at 17%
• % share in world trade is less than 10%
India Exports
2008
3% East Asia
14%
Europe
33%
7% Middle East
Africa
North America
19%
South America
24%
Data Source: DGCIS, Kolkata
India Imports
2008
East Asia
3%
9%
Middle East
6% 31%
Europe
Africa
22%
North America
29% South America
Data Source: DGCIS, Kolkata
Infrastructure Growth in India
SPLITTING
Bulk Cargo Handled During 2008
43% ‘000 Tons
57%
Kandla
64893
Mundra Kolkata Dock System
110 Haldia 57282
2500 Pipavav Paradip
57039 MBPT 42438
JNPT
55756 Gangavaram Visakhapatnam
64597
Kakinada
35128 16662 2626
Mormugao Krishnapatnam 8209
36019
New Mangalore 57154
Chennai
15810
Cochin Tuticorin
21480
Containers Handled During 2008
28%
‘000 TEUs
72%
Kandla
137 Kolkata Dock System
Mundra 449
717 Haldia
Pipavav
179 Paradip 2
JNPT
3945 87
Visakhapatnam
Mormugao
25 New Mangalore 1140
Chennai
260 Cochin Tuticorin
440
Ports = Gateway or Funnel ?
More than 70% of
Container movement
through two gateways
Kandla
Mundra
Kolkata Dock System Back end infrastructure
Haldia
Pipavav unable to support the
JNPT growing infrastructure
Visakhapatnam
Mormugao
New Mangalore
Chennai Gateways tuned to funnels
Cochin Tuticorin
Solution lies in de-hubbing congested ports and use alternate efficient gateways
DISCOVERING
Vibrant East
Kolkata Dock System
Haldia
Paradip
Visakhapatnam
Chennai
MAJOR INDUSTRIES IN TAMIL NADU
• Agro based Industry
• Automobile
• Bio-Technology
• Chemical and Petro Chemical Industry
• Cotton Textile and Hosiery
• Engineering Industry
• Glass
• IT & ITES Kandla Kolkata Dock Syste
• Leather Industry
Haldia
• Metals MBPT
• Mineral based Industry JNPT Paradip
• Paper Industry
Visakhapatnam
• Pharmaceuticals Industry
Mormugao
• Readymade Garments Industries
• Wood Products Industry New Mangalore
Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN ANDHRA PRADESH
• Agro based Industry
• Bio-Technology
• Bulk drugs and Pharmaceuticals
• Chemical and Petro-Chemical Industry
• Cotton Textile and Hosiery
• Cement
• Engineering Industry
• Fertiliser
Kandla Kolkata Dock System
• Horticulture
• IT industry Haldia
MBPT
• Mines and Minerals Paradip
JNPT
• Oil & Natural Gas
• Paper Visakhapatnam
• Poultry & Fisheries Mormugao
• Spices New Mangalore
• Textiles and Apparel industry Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN ORISSA
• Agro Based Industry
• Cement
• Fertilizer
• Forest Based Industry
• Handloom
• Iron and Steel
• Information and Technology
• Minerals & Metals
Kandla Kolkata Dock System
• Mining
Haldia
• Paper MBPT
• Sugar Paradip
JNPT
Visakhapatnam
Mormugao
New Mangalore
Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN CHATTISGARH
• Agro Based Industry
• Biotechnology
• Cement
• Power
• Minerals &Metals
• Mining
Kandla Kolkata Dock System
• Iron & Steel
Haldia
MBPT
JNPT Paradip
Visakhapatnam
Mormugao
New Mangalore
Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN WEST BENGAL
• Agro based Industry
• Automobile
• Bio-Technology
• Cotton Textile
• Engineering Industry
• IT & ITES
• Jute
• Leather Industry
• Metals Kandla Kolkata Dock System
• Mineral based Industry Haldia
MBPT
• Tea
JNPT Paradip
Visakhapatnam
Mormugao
New Mangalore
Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN BIHAR
• Agro Based Industry
• Power
• Oil Refinery
• Textiles
• Engineering Industries
• Steel
Kandla Kolkata Dock System
• Mining
Haldia
MBPT
JNPT Paradip
Visakhapatnam
Mormugao
New Mangalore
Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN EASTERN MHARASHTRA
• Agro Based Industry
• Power
• Engineering Industries
• Steel
• Paper
Kandla Kolkata Dock System
Haldia
MBPT
JNPT Paradip
Visakhapatnam
Mormugao
New Mangalore
Chennai
Cochin Tuticorin
MAJOR INDUSTRIES IN EASTERN MADHYA PRADESH
• Agro Based Industry
• Textiles
• Mining
• Diamond Production
• Cement
• Sugar
Kandla Kolkata Dock System
Haldia
MBPT
JNPT Paradip
Visakhapatnam
Mormugao
New Mangalore
Chennai
Cochin Tuticorin
Development of the Notified SEZs
West Bengal Others, 7
Uttar , 6
Pradesh, 8 Andhra
Tamil Nadu, Pradesh, 68
27
Rajasthan,
4
Orissa , 2
Gujarat ,
Punjab, 2 16
Karnataka ,
Maharashtra Haryana, 15
20
, 24
Madhya
Pradesh, 3 Kerala , 8
From the Fields…
Rice
Maize
Cotton
Soya
Center of Action
Highly Developed
Developed
Internal issues
Developing
Center of Action
Major Investments in
• Steel
• Cement
• Oil Exploration & Refinery
• Power
• Chemicals
• Refractories
• Aluminium
• Mining
• Apparel
• Engineering
• Sugar and Food Processing
• Bio- Diesel
These new developments are happening within 700Km of Visakhapatnam
Ports on the Eastern Seaboard
Kolkata
Major Ports
- Kolkata/Haldia
Gopalpur
- Paradip
- Visakhapatnam
Gangavaram
- Ennore
- Chennai
- Tuticorin (other side of Cape Camorin)
Krishnapatnam
Large Non Major Ports
Ennore
- Gangavaram
Kariakal
- Kakinada
- Krishnapatnam
Container Terminals on the Eastern Seaboard
Kolkata
Gopalpur
Gangavaram - Kolkata/Haldia
Krishnapatnam
- Visakhapatnam
- Chennai
East Coast Hinterland (Containers)
Kolkata Dock System
Haldia
VCTPL
CCT, CITPL
The Right Thing on the Right Side
• New port and terminals should be patronised
• Warehousing and distribution hubs closer to
the „center of the action‟. Take Right, avoid
round-about.
• Evolve to 3PL and 4PL
CONSOLIDATING
Back to Barter
CASE: India exports Iron Ore to China and Imports Coal from China
Iron Ore
Coal
Box‟vantage
• Ultra Large Container Vessels of over • Two Way cargo movement between
12000 TEU carrying capacity (Emma India and China
Maersk, MSC Daniella) are deployed on
the major trunk routes. • Large volumes move in bulk vessels
• The next order vessels (8000 TEU) have to
find employment on the minor trunk
routes
• During a 24 hr operation in a Indian Port, • Evacuation of bulk cargo takes days
an average of 20000 tons discharged / • Goods rail run at 40Kmph
loaded in bulk operation using two cranes
• During the same period, 24000 tons can be • Evacuation takes hours with containers
loaded / discharged in container operations • Container trains run a 100Kmph
using same number of cranes
Back to Barter
The concept can be extended to all
commodities traded between any
pair of countries
Intra- Asia has over 160 Free Trade
Agreements
Free Pollution to Pollution Free
Need of the Hour
on the East Coast of India
• Ports with deep harbour to accommodate bigger vessels
• Ports closer to the growing „action‟ area
• Ports with efficient handling systems including dedicated container berths
• Ports that can cater to faster evacuation of cargo
• Un-congested
• Ability to expedite large volumes of cargo
• Rail and Road links to hinterland
• Capable to expand with growing needs
Regional Hubbing – Kolkata , Chittagong, Yangoon, Renong, Andaman, Chennai, Vizag
Kolkata / Haldia
• Old and established port with promising hinterland
• 0.045 million TEUs handled every year
• Closer to land locked countries of Nepal and Bhutan
• Acute shortage of space and hence often congested
• Riverine Port - severe draft restrictions
• Absence of efficient container handling systems
• No possibility of further expansions
Visakhapatnam
• In the middle of the fastest developing region in India.
• Efficient container handling infrastructure
• Ample space and un-congested
• Deepest container terminal on the East Coast of India
• Possibility for further expansions
• Well connected to central, eastern, and southern India both by road and rail
• Feasible to cater to 5 ICDs across India and Nepal • Limited ICD movement
• Proximity to the straits of Malacca • Currently handling 0.08 million TEUs only
• Manufacturing base still growing in the immediate hinterland
Chennai
• Efficient container handling infrastructure
• 1 million plus throughput
• New capacity added ( CITPL )
• Hinterland with large manufacturing base
• Presence of major Mainline and Feeder services
• No ICD movement
• Located down south
• Port approach through the city – poses congestion problems
International Logistics Connection to
the Fast Emerging Market in India
Summary
• The nucleus of world trade shifting to Asia
• Over 160 Free Trade Agreements in Inter-Asia region
• India adopted “Look East” policy
• East Coast is the center of action in India
• Deep draft harbours with dedicated container terminals within close
proximity of the growing hinterland is the need of the hour
• Solution lies in directional distribution and regional hubbing
• We need to grow pollution free
