PORTS For updated information, please visit www.ibef.org November 2020 Table of Contents Executive Summary .…………….…….…....3 Advantage India …………..……………...….5 Market Overview …..……………….….…….7 Recent Trends and Strategies .……...........16 Growth Drivers and Opportunities .….........21 Key Industry Organisations ....……….........31 Useful Information ………..………………...33 EXECUTIVE SUMMARY Cargo capacity at major ports (million tonnes) Cargo traffic at major ports (million tonnes) 1,600 800 1,400 1,514 700 1,451 1,200 600 699.05 1,000 500 679.36 647.43 1,065 704.82 606.37 800 965 400 354.81 600 300 400 200 200 100 - 0 FY16 FY17 FY18 FY19P FY16 FY17 FY18 FY19 FY20 FY21T* . Ports in India handle around 95% of international trade volume of the country. Increasing trade activities and private participation in port infrastructure is set to support port infrastructure activity in India. India has 12 major ports. Under the National Perspective Plan for Sagarmala, six new mega ports will be developed in the country. India’s major ports had a capacity of 1,514.09 million tonnes per annum (MTPA) by FY19P. The Maritime Agenda 2010-20 has a 2020 target of 3,130 MT of port capacity. InY F 20, major ports in India handled 704.82 million tonnes (MT) of cargo traffic, implying a CAGR of 2.74% during FY16-FY20. As per Union Budget 2020-21, the total allocation for the Ministry of Shipping stands at Rs. 1,800 crore (US$ 257.22 million). Note: P - Provisional, T-Tentative, *- Till October 2020 Source: Ministry of Shipping - GOI, Care Ratings, Indian Ports Association 3 Ports For updated information, please visit www.ibef.org EXECUTIVE SUMMARY Iron ore^ traffic (MT) Container traffic in India (‘000 TEU) 12 60.00 54.99 9.98 10 50.00 9.88 9.14 48.59 8 38.39 8.42 40.00 42.54 8.20 40.69 6 30.00 4.93 4 20.00 2 10.00 15.35 0 0.00 FY16 FY17 FY18 FY19 FY20 FY21T* FY16 FY17 FY18 FY19 FY20 FY21T* . Out of India’s 204 non-major ports, 44 are functional and strategically located on the world’s shipping routes. Trade will boost demand for containers. In FY20, container traffic in India (for major ports) reached 9.98 TEUs, implying a growth of 1.12% y-o-y. Infrastructural development will increase demand for iron and steel. In FY20, iron ore^ traffic at major ports reached 54.99 MT. In November 2019, JSW Infrastructure commissioned a new iron ore terminal at Paradip port in Odisha with a capacity to handle up to 18 million tonnes of cargo per annum. Notes: TEU - Twenty Foot Equivalent Unit, ^ - Including pellets, T-Tentative, *- Till October 2020 Source: Ministry of Shipping - GOI, Indian Ports Association 4 Ports For updated information, please visit www.ibef.org Ports ADVANTAGE INDIA ADVANTAGE INDIA . InY F 20, major ports in India handled . Total investment in Indian ports by 2020 is 704.82 million tonnes of cargo traffic, expected to reach US$ 43.03 billion. implying a CAGR of 2.74% during FY16- . Non-major ports are set to benefit from 20. strong growth in India’s external trade. Special Economic Zones (SEZ) are being developed near several ports, comprising of coal-based power plants, steel plants and oil refineries. ADVANTAGE INDIA . The Government has initiated NMDP, an . India has a coastline which is more than initiative to develop the maritime sector. The 7,517 kms long, interspersed with more planned outlay is US$ 11.8 billion. than 200 ports. Most cargo ships that sail between East . FDI of 100% is allowed under the automatic Asia and America, Europe and Africa pass route and a 10-year tax holiday is given to through Indian territorial waters. enterprises engaged in ports. India is the largest importer of thermal coal . The Major Port Authorities Bill, 2020, in the world. provides regulation, operation and planning for the major ports in India and provides greater autonomy to these ports. It seeks to replace the Major Port Trusts Act, 1963. Note: NMDP - National Maritime Development Programme, FDI - Foreign Direct Investment, MMT - Million Metric Tonnes Source: Report of the Task force on Financing Plan for Ports, Government of India, Indian Ports Association, Ministry of Shipping 6 Ports For updated information, please visit www.ibef.org Ports MARKET OVERVIEW CATEGORIES OF PORTS IN INDIA Ports in India Major Non-major (minor) . There are 12 major ports in the . India has about 200 non-major country - 6 on the eastern coast ports. and 6 on the western coast. Non -major ports come under the . Major ports are under the jurisdiction of the respective state jurisdiction of the Government of Governments’ Maritime Boards India and are governed by Major (GMB). Port Trusts Act 1963, except Ennore port, which is administered under the Companies Act 1956. Source: Ministry of Shipping 8 Ports For updated information, please visit www.ibef.org MAJOR PORTS IN INDIA Kandla Kolkata Paradip Mumbai JNPT Visakhapatnam Mormugao New Mangalore Ennore Port Blair Chennai Cochin V.O. Chidambaranar Note: JNPT - Jawaharlal Nehru Port Trust 9 Ports For updated information, please visit www.ibef.org CARGO TRAFFIC IS ON THE RISE … (1/2) Cargo traffic at major ports in India: Cargo traffic at major ports (million tonnes) . Stood at 704.82 million tonnes in FY20T, growing at a CAGR of 800 3.83% from FY16-FY20. ^CAGR 3.83% . In August 2019, India became the first country in the world to issue 700 Biometric Seafarer Identity Document (BSID), capturing the facial bio-metric data of seafarers. 704.82 600 699.05 679.36 . November 2019 witnessed the first ever movement of container 647.43 cargo on Brahmaputra (National Waterway 2), focused on improving 500 606.37 the connectivity to Northeast Region (NER). 400 . In 2019, upgraded Port Community System was introduced for all 354.81 ports. 300 200 100 0 FY16 FY18 FY19 FY20 FY17 FY21T* Note: FY - Indian Financial Year (April-March), ^CAGR is up to FY20, T- Tentative, *- Till September 2020 Source: Ministry of Shipping 10 Ports For updated information, please visit www.ibef.org CARGO TRAFFIC IS ON THE RISE … (2/2) Market Share of Major and Non-Major Ports Cargo traffic at Non-major Ports (million tonnes) 120% 700 100% 600 39% 42% 43% 45% 43% 43% 42% 45% 80% 500 582.6 60% 400 529.6 485.3 61% 466.1 58% 57% 57% 57% 58% 55% 55% 300 447.21 40% 200 20% 100 0% FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 0 FY16 FY17 FY20* Major Ports Non-major Ports FY18P FY19P Non-major ports are evolving faster than major ports Cargo traffic at non-major ports - . Non -major ports are gaining share and a major chunk of traffic has . Reached 447.21 million tonnes in FY20P (till December 2019). shifted from major ports to non-major ports. Increased at 7.7% CAGR between FY16-FY19. The contribution of non-major port’s traffic to total traffic rose to 45% in FY19. Note: P - Provisional, *- Till December Source: Ministry of Shipping Annual Report 2019-20 11 Ports For updated information, please visit www.ibef.org CARGO PROFILE AT MAJOR PORTS IN INDIA … (1/2) Cargo at major ports in FY16 Cargo at major ports in FY20 Liquid (petroleum, oil Liquid (petroleum, oil Solid Container Solid Container and lubricants) and lubricants) Share: 46.4% Share: 33.3% Share: 20.3% Share: 41.7% Share: 37.5% Share: 20.8% Iron ore Share: 2.1% Iron ore Share: 5.8% Coal Share: 22.7% Coal Share: 23.1% Fertilizer Share: 2.6% Fertilizer Share: 2.2% Other cargo Share: 18.9% Other cargo Share: 10.6% Source: Ministry of Shipping 12 Ports For updated information, please visit www.ibef.org CARGO PROFILE AT MAJOR PORTS IN INDIA … (2/2) . Solid cargo contributes the largest share to all traffic handled at major ports in India, followed by liquid cargo and containers. Cargo traffic at major ports (million tonnes) . DuringY F 08-FY19, CAGR in volume for different segments was as 800 below - • Solid cargo was 1% 700 • Liquid cargo was 4% 145 600 134 • Container cargo was 4% 125 123 119 114 101 120 115 . 500 262 Solid, liquid and container cargo traffic during FY19 was 292 MT, 93 244 120 92 262 MT and 145 MT, respectively. 212 196 189 175 400 179 187 179 . 176 169 Adani Port and Special Economic Zone (APSEZ) became the first 186 Indian port operator to handle cargo movement of 200 million tonnes 300 (MT) in FY19. 311 302 292 287 285 277 273 261 261 . 200 258 Ease of Doing Business-Implementation of Radio Frequency 254 240 Identification (RFID) based Port Access Control System (PACS) at Kolkata Dock System (KDS) was introduced in October 2019. 100 Rabindra Setu and three Truck Parking Terminals at KDS were also inaugurated in 2019. 0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Solid Liquid Container Source: Ministry of Shipping; Indian Ports Association 13 Ports For updated information, please visit www.ibef.org INCREASE IN CAPACITY AND PROFITS OVER THE YEARS Net Profit and Operating Margin at Major Ports Capacity and utilisation at major ports (million tonnes) 600 50% 1,600 120.0% 500 1,400 529.6 40% 100.0% 400 1,200 1,477 425.8 30% 1,451 80.0% 300 1,000 280.1 305.2 20% 800 60.0% 965 200 1,065 600 872 178.4 10% 801 40.0% 100 159.2 745 690 400 670 617 575 532 0 0% 200 505 20.0% 0 0.0% FY13 FY14 FY15 FY16 FY17 FY18 Net Profit (US$ million) Utilisation (%) FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19P .