Sagarmala Project of India

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Sagar Mala project is a strategic and customer-oriented initiative of the Government of India to modernize India’s Ports so that port-led development can be augmented and coastlines can be developed to contribute in India’s growth.

It looks towards “transforming the existing Ports into modern world class Ports and integrate the development of the Ports, the Industrial clusters and hinterland and efficient evacuation systems through road, rail, inland and coastal waterways resulting in Ports becoming the drivers of economic activity in coastal areas.

In consonance with India’s vision for ‘Blue Economy,’ the flagship ‘Sagarmala’ project aims to increase port-led development along the country’s 7,500 km long coastline.

Unveiled in March 2015, the project of the Ministry of Shipping promises to become a major game changer. It envisages unlocking the full potential of India’s coastline and waterways through investments in logistics and various coast related infrastructure.

With this, not only will the country’s economy receive a significant boost, it will also lead to creation of thousands of jobs for youth in the coastal region.

Construction of new ports, port modernization, and port connectivity, development of coastal economic zones, industrial clusters and smart cities are part of ‘Sagarmala’s’ over 400 projects.

In a 20 year period, the mega project which requires an investment of over Rs. 8 trillion would be complete. Of the total mega-project, 199 projects would be taken up for implementation by 2020, while 239 projects are under various stages of implementation and development.

This speaks volumes about the speed with which Sagarmala project is being executed. For this, however, credit must go to the Sagarmala Development Company which has been established to ensure that the project faces no glitches.

According to a study, Sagarmala project on completion would reduce logistic costs which would in turn lead to saving Rs 350 billion to Rs 400 billion per annum. It would also benefit the country’s export-import trade and industries.

14 CEZs across all 13 coastal states will be developed under this project. Gujarat, Maharashtra, Goa, Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Odisha and West Bengal would be states where CEZs will be developed. These CEZs will be linked with a total of 29 industrial clusters.

Of them, two would belong to refinery and petrochemicals, four gas-based petrochemicals, three coastal power, two steel, two marine, two cement, two food processing, two science and technology clusters, three apparel, one automotive, three leather and footwear and three furniture clusters.

By establishing these units closer to ports, the government wants to reduce the logistical costs which in turn will increase competitiveness of the Indian goods in the international market.

The ambitious project is one which really conjures up Prime Minister Narendra Modi’s vision of making India a powerful ‘blue economy’.

Background:

Presently, Indian ports handle more than 90 percent of India’s total EXIM trade volume. However, the current proportion of merchandize trade in Gross Domestic Product (GDP) of India is only 42 percent, whereas for some developed countries and regions in the world such as Germany and European Union, it is 75 percent and 70 percent respectively.

Therefore, there is a great scope to increase the share of merchandising trade in India’s GDP. With the Union Government’s “Make in India” initiative, the share of merchandise trade in India’s GDP is expected to increase and approach levels achieved in developed countries. India lags far behind in ports and logistics infrastructure.

Against a share of 9 percent of railways and 6 percent of roads in the GDP the share of ports is only 1 percent. In addition high logistics costs make Indian exports uncompetitive. Therefore Sagarmala project has been envisioned to provide ports and the shipping the rightful place in the Indian economy and to enable port-led development.

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