PM Modi's Big Focus on Ports - Why It's Crucial, What's Missing

Mumbai: Mumbai's commercial seaport, which handles over half the container traffic through India's major ports, is doubling capacity as Prime Minister Narendra Modi seeks to build an export powerhouse.

The expansion, due to be completed in seven years, can't come quickly enough for Avinash Gupta, whose family business supplies steel forgings to Europe and the United States from the industrial hub of Ludhiana in Punjab.

Yet the greatest challenge his $30 million business faces is getting his production to port. Mr Gupta pays nearly Rs 50,000 to a state-run rail cargo company to transport a 20-foot container to Mumbai - as much as 40 times the cost of shipping it onward to the Gulf commercial hub of Dubai.

It is exporters like Mr Gupta that PM Modi had in mind when he launched his 'Make in India' drive last September, laying out a model of "port-led" development that would support industrial growth and help create manufacturing jobs.

The PM's vision includes creating a tax union to slash costs and transport times, and a network of industrial corridors connecting the interior to ports. But political opposition to both the new tax and a law making it easier to buy land for development mean those may be years away.

At the state-owned Jawaharlal Nehru Port Trust (JNPT) in Mumbai, it can take up to 12 hours for a truck to enter the port due to narrow approach roads, limited parking and customs delays. More than 10,000 trucks enter every day.

Analysts estimate it takes up to four times as long to fill or unload a cargo ship at JNPT than at private rival the Adani Port and Special Economic Zone Ltd up the coast in Gujarat, PM Modi's home state.

Last year, Mumbai's Jawaharlal Nehru Port Trust signed a $1.26 billion deal with Singapore's PSA International to build a fourth terminal on reclaimed land.

That would boost capacity and turnaround times and cut costs - Imports, too, are hobbled by the poor infrastructure, with several container shippers imposing congestion surcharges to cover the cost of delays in unloading.

India added 71 TEU of capacity at major ports in the fiscal year to March 31. The PM wants to double total capacity to 1,600 million tonnes at major ports over the next five years.

But businesses hit by the worst slide in exports since the global crisis of 2008 say PM Modi's approach to easing rules for trade and expanding state-run ports fails adequately to tackle competitive barriers.

"Even a delay of a few hours results in missing the vessel and sometimes cancellation of an order," said Khalid Khan, a Mumbai-based exporter of engineering goods and regional president of the Federation of Indian Export Organisations.