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India Eyes Operating Role in Foreign Ports With New State Consortium

Chabahar
Grain unloading operations at the Indian-run port of Chabahar, Iran (file image)

Published Oct 15, 2024 1:23 PM by The Maritime Executive

 

As India continues to revamp its domestic shipping sector, reports have emerged that it is eyeing control of strategic foreign terminals. According to a report by the Indian business newspaper Mint, the government is in the process of creating a port consortium, with the goal of venturing into the terminal operator business.

The consortium includes three state-owned agencies: India Ports Global Ltd (IPGL), Sargarmala Development Co Ltd (SDCL) and Indian Port Rail and Ropeway Corp (IPRCL). Primarily, the consortium will target development opportunities along key corridors that serve India’s national interests.

One example is the International North-South Transport Corridor (INSTC), a 4,474 mile multi-modal network connecting India to Russia, Iran, Central Asia and Europe. India has already committed to invest $120 million in the development of Iran’s Chabahar port, which is a key node along the INSTC. This investment came with a 10-year agreement with Iran for the operation of the port.

In addition, the consortium will also be targeting port infrastructure along the proposed India- Middle East- Europe Economic Corridor (IMEC). This ambitious project was launched last year at the G20 Leaders’ Summit in New Delhi. It will connect India to Europe by ship-to-rail connections through the UAE, Saudi Arabia, Jordan, Israel and Greece. India is already considering a terminal at Greece’s Port of Piraeus for its European exports.

According to Shipping Secretary TK Ramachandran, the three state agencies forming the consortium will have different roles. The IPGL will be responsible for the day-to-day operations of the foreign terminals. The IPRCL will handle construction of necessary infrastructure to support port operations, and the SDCL will focus on raising financial resources to fund the development projects.

The creation of the consortium comes against the backdrop of a number of deals that India has won to operate foreign ports. In July, India secured operational rights of a terminal of Bangladesh’s Mongla Port. IPGL’s proposal to run Sittwe port in Myanmar also got approval early this year. This gave India access to the strategic port on the Kaladan River.