India’s ports are struggling to stay afloat as economic turbulence originating in the US continue to rock the country’s coasts, bringing a sharp fall in maritime trade.
After growing at a compounded annual rate of more than 11 per cent in the last five years, cargo traffic at six major ports — Ennore, Vishakhapatnam, Cochin, Halida, Mumbai, Kolkata — contracted in 2008-09.
Kolkata recorded the sharpest fall during the year with traffic falling by nearly 10 per cent.
The 7,517-km long Indian coastline is peppered with 13 major ports and 187 minor ports carrying out about 95 per cent of the country’s merchandise trade, which has taken a knock.
The major ports together handled a total of 530 million tonnes of cargo in 2008-09, while the non-major or minor ports handled about 190 million tonnes of cargo during the year
“A slowdown in trade is expected to pull down traffic growth rates at ports. Given an even lower economic growth rate forecast for 2009-10, cargo traffic is expected to remain flat,” Sudhir Nair, head of research at credit rating firm CRISIL, told Hindustan Times.
India’s exports contracted for the fifth successive month plunging by 21.7 per cent in February. It had declined by 12.1 per cent, 9.9 per cent, 15.9 per cent year-on-year in the previous four months.
Shahzad Hussain, chairman of Jawaharlal Nehru Port Trust, said the turnaround time in ports has come down as fewer ships are berthing.
Imports fell faster than exports, declining by 23.3 per cent in February, down from the previous month’s contraction of 18.2 per cent.
“It is expected that, trade in most commodities could remain subdued in 2009 and some of the key maritime sectors including ports would see demand side stress,” said Arvind Mahajan, Executive Director with consulting firm KPMG.
Industry experts said port authorities are also scaling down their planned investments in wake of the slowdown.