Model Answer

Introduction

India’s maritime sector plays a crucial role in its economy, with over 95% of trade by volume and 65% by value depending on sea transport. Recent reforms in India’s port sector have boosted its global recognition and operational efficiency. The World Bank’s 2023 Logistics Performance Index (LPI) report highlights India’s impressive progress, with the country moving from 44th to 22nd in the “International Shipments” category since 2014.

Key Reforms in India’s Port Sector

1. Sagarmala Initiative (2015)

• The Sagarmala Initiative was launched to harness India’s extensive coastline and waterways for port-led industrialization.
• Focus Areas:
  • Enhancing port infrastructure and logistics efficiency.
  • Promoting coastal and inland shipping.
  • Optimizing cargo-handling capacity and reducing logistics costs.
• Impact: Sagarmala is transforming ports into hubs of industrial and economic growth, making India more competitive globally.

2. Port Modernization and Expansion

• Substantial investments have been made to modernize and expand existing ports and develop new ones.
• Upgraded Facilities:
  • Ports have been equipped with deeper drafts and better cargo-handling capabilities.
  • For example, the capacity at 12 major Indian ports has grown from 871 million metric tonnes (MMT) in 2015 to 1,617 MMT in 2023.
• These improvements allow ports to handle larger vessels and a wider range of cargo types, contributing to better trade facilitation.

3. Private Sector Participation

• The government has promoted Public-Private Partnerships (PPPs) to enhance efficiency and innovation in port operations.
• Benefits: This has attracted significant investments, improving port infrastructure and management.

4. Liner Shipping Reforms (2016)

• The Liner Shipping Reforms aim to make Indian ports more competitive.
• Achievements:
  • Lower shipping costs.
  • Enhanced turnaround times, with India’s average turnaround time (TRT) of 0.9 days, among the best globally.

5. Green Port Guidelines

• The Harit Sagar Green Port guidelines promote sustainable practices in ports, focusing on environmentally safe operations, which helps in reducing the ecological footprint.

Legislative Changes Supporting Port Reforms

1. Major Port Authorities Act, 2021

• This act grants greater autonomy to major ports, empowering them to operate more efficiently and independently.

2. Marine Aids to Navigation Act, 2021

• Ensures better safety and efficiency in vessel traffic management, aligning with global standards.

3. Indian Vessels Act, 2021

• Standardizes regulations for inland waterways across the country, improving uniformity and operational efficiency.

4. Ease of Doing Business

• The National Logistics Portal (Marine) provides a single-window digital platform for various stakeholders, streamlining the processes involved in cargo services, regulatory compliance, and financial services.
• The Sagar Setu app further enhances the ease of goods movement in ports.

5. Foreign Direct Investment (FDI)

• The government allows 100% FDI in port projects under the automatic route, along with a 10-year tax holiday for port developers, which promotes private investment in port infrastructure.

Future Directions

1. Integrated Connectivity

• There is a need to strengthen the integration of ports with railways, roadways, and inland waterways for seamless cargo movement between ports and hinterlands.

2. Digital Transformation

• Adopting advanced technologies like blockchain, Internet of Things (IoT), and artificial intelligence will streamline port operations, including cargo tracking and documentation processes.

3. Investment Promotion

• The government plans to attract more investments through PPP models and investor-friendly policies.

4. Regional Connectivity

• Promoting transshipment and coastal shipping will enhance India’s regional trade, especially in the Indian Ocean.

5. Safety and Security

• Ensuring strict safety measures and compliance with international standards is essential to prevent accidents and environmental hazards at ports.

Model Answer

Prospects of Inland Waterways in India

1. Reduction in Transportation Cost: Inland waterways offer a cost-effective alternative to road and rail transport. According to a study, one liter of fuel can move 24 tons of cargo for 1 km on roads, 95 km on rail, and 215 km on inland waterways, highlighting the cost-effectiveness of water transport.
2. Environmentally Friendly: Waterways reduce road congestion and vehicular pollution by transporting goods across rivers and canals, easing the burden on highways. This shift not only benefits the environment but also enhances road safety.
3. Boost Economic Integration: Integrating inland waterways with national projects like the Dedicated Freight Corridors (DFCs) and the Sagarmala Project facilitates the smooth exchange of goods across transport modes. This connectivity can stimulate economic growth by connecting remote regions, such as the North-Eastern states, to global trade routes. The Kaladan Multi-Modal Project is a notable example, offering a more efficient route to the region.
4. Multiplier Effect and Linkages: Investment in inland waterways fosters growth across sectors, including port development, boat-building, and ancillary industries, creating jobs and enhancing regional development.

Challenges of Inland Waterways in India

1. Lack of Continuous Connectivity: While the waterway network spans across 15,000 km, it lacks continuous connectivity. For instance, in 2018, a cargo vessel got stuck near Ramrekha Ghat in Bihar due to shallow waters, highlighting the inconsistent navigability of certain routes.
2. Inadequate Water Channel Depth: Many national waterways suffer from insufficient depth, especially due to siltation and seasonal variations, making them unsuitable for large vessels. Approximately 20 out of the 111 identified waterways are deemed unviable for regular use.
3. High Turnaround Time: The absence of efficient material handling equipment and inadequate terminal facilities at key ports results in slow cargo evacuation, leading to congestion and high turnaround times.

In conclusion, while inland waterways have substantial potential in reducing costs and enhancing economic integration, addressing connectivity, depth issues, and port infrastructure is crucial for realizing their full potential.

Model Answer

Introduction

The expansion of existing airports and development of new ones in India can provide numerous advantages beyond just enhancing travel connectivity. Here are the key benefits:

1. Employment Opportunities

Expanding airport infrastructure leads to a significant increase in employment across various sectors. This includes direct jobs in aviation, ground staff, engineering, and managerial positions. The air transport sector supports 6.2 million jobs in India, with 2.5 lakh jobs in aviation and aeronautical manufacturing alone.

2. Economic Growth

The aviation sector plays a pivotal role in driving economic growth. By facilitating trade, tourism, and attracting investments, airports contribute significantly to GDP. According to the International Air Transport Association, the air transport industry supports an estimated US $13 billion in India’s GDP.

3. Technological Advancements

Airport expansions often involve the integration of advanced technologies that improve efficiency, safety, and the passenger experience. A notable example is the introduction of DIGIYATRA in 13 Indian airports, which has streamlined the boarding process for passengers.

4. Support for Remote Communities

Airports in remote areas provide vital services, including healthcare access and postal services. The UDAN 5.1 scheme, for instance, plans to enhance connectivity to remote regions, including through helicopter services, improving the quality of life for residents.

5. Attraction of Foreign Tourists and Investment

Airports make regions more attractive for multinational companies and foreign tourists, thus fostering foreign direct investment (FDI). In 2022, international visitors spent USD 22.9 billion in India, showcasing the positive impact of improved connectivity on tourism and investment.

6. Social Integration

Improved air connectivity promotes social integration by making travel more accessible, facilitating cultural exchange, and enhancing mutual understanding among different regions of the country.

7. Humanitarian Aid and Disaster Relief

Airports play a crucial role in rapid disaster response by enabling the swift deployment of humanitarian aid and emergency personnel during natural disasters.

In conclusion, airport expansion in India not only enhances connectivity but also supports employment, economic growth, technological innovation, social integration, and disaster relief efforts. However, it is essential to focus on affordability, as air travel remains out of reach for many citizens.

Model Answer

Landlord Ports

A landlord port is a management model where a public port authority serves as a landlord, overseeing infrastructure and regulations, while private companies handle port operations, such as cargo handling. India is transitioning its major ports to this model under the Maritime India Vision (MIV) 2030, with plans for 39 berths to adopt it.

Key Contributions of Landlord Ports

1. Streamlined Governance

• By separating the landlord and operational roles, this model removes the conflict of interest inherent in the earlier system.
• It promotes independent and efficient oversight while fostering fair competition among private terminal operators.

2. Enhanced Operational Connectivity

• Private global companies bring extensive networks, improving interconnectivity across supply chains.
• Example: DP World linked JNPT to global shipping lines and inland logistics hubs.

3. Technological Advancements

• Private operators introduce advanced technologies, enhancing productivity and reducing operational costs.
• Example: Automated Guided Vehicles implemented by private players boost container handling capacities.

4. Improved Service Quality

• Competition among private entities drives innovation, efficiency, and customer satisfaction.
• Example: JNPT’s 100% landlord model spurred competition among private container operators, resulting in superior services.

5. Increased Investments

• The model encourages private sector participation, unlocking investments in port infrastructure.
• Example: MIV 2030 anticipates investments of ₹1,00,000–₹1,25,000 crores for capacity expansion.

Challenges and the Way Forward

• Coordination Issues: Diverse technologies used by private players may lead to integration challenges.
• Cybersecurity Concerns: Increased private participation necessitates robust cybersecurity frameworks.

Despite these challenges, the landlord port model, with its focus on private investment and operational excellence under government oversight, is poised to enhance India’s port efficiency, bolstering trade competitiveness and economic growth.

Model Answer

India’s agricultural sector faces significant barriers in adopting integrated cold chain infrastructure (CCI), which is essential for improving food security, reducing wastage, and enhancing export potential. Despite the advantages of CCI, such as promoting food safety, boosting farmer incomes, and improving food availability, less than 10% of agricultural produce passes through a cold chain system. Below are the key challenges:

1. Investment Barriers

The cold chain infrastructure requires substantial capital investment, but the long payback periods and the risk of technology obsolescence deter investors. Cold chain facilities require large upfront costs, which result in low returns on investment, making it a less attractive option for capital deployment.

2. Lack of Awareness

Many stakeholders, especially farmers and small businesses, perceive CCI as a luxury rather than a necessity. There is insufficient awareness about the importance of cold chain systems for maintaining the quality and safety of perishable goods, leading to underutilization of cold storage and transportation facilities.

3. High Operating Costs

Operating an integrated cold chain is expensive due to high fuel costs, which constitute around 45% of the operating expenses for cold storage in India. The rising fuel prices further increase the financial burden on operators, reducing profitability and limiting the expansion of cold chain infrastructure.

4. Inadequate Technological Integration

Many cold chain facilities still rely on manual processes for temperature monitoring and inventory management. The lack of technology integration leads to inefficiencies, data inaccuracies, and delayed decision-making, resulting in increased spoilage and losses of perishable goods.

5. Disproportionate Funding and Inefficient Infrastructure

Government subsidies have disproportionately favored cold storage, while critical components such as refrigerated transport, pack houses, and pre-cooling units receive minimal support. Additionally, infrastructure issues like inconsistent power supply, poor transportation networks, and lack of last-mile connectivity contribute to inefficiencies and operational challenges.

6. Geographical Accessibility

Cold chain infrastructure is concentrated in urban areas, leading to uneven access for rural farmers. This creates logistical challenges, low utilization rates of facilities, and increased costs for farmers, making the adoption of CCI less attractive.

Conclusion

India’s cold chain infrastructure needs a holistic approach, integrating technology, funding, and better access to rural areas. Addressing these challenges will reduce post-harvest losses (estimated at ₹92,561 crore annually) and unlock the full potential of the sector. Strategies like farmer education and innovative business models, such as “pay-as-you-store,” can facilitate greater adoption of CCI.