A new foreign port investment business has been announced by the Indian government, aimed at securing capacity for the country’s growing trade and balancing similar moves by China.
The new company will be similar in operation to Dubai’s DP World or Singapore’s PSA International, and will be named Indian Ports Global (IPG).
Forming next month, the new company will aim to purchase or develop ports in Africa, Australia and South East Asia in particular.
IPG will be funded by India’s 13 government-owned ports, with a starting purse of Rs25bn (US$555m), with a further Rs50bn (US$1.11bn) available through a potential bond issue, an IFW report said.
IPG’s investment in foreign ports is aimed at securing capacity for Indian trade. Nearly 90 per cent of India’s trade is by sea, and the country’s exports are expected to double by 2014, according to government officials.
India’s Ministry of Shipping predicts annual traffic at the country’s major ports will rise from a current 963m tonnes to 3.23bn tonnes by 2020.
“Developing and owning ports helps to reduce the logistics costs and provides priority access for your own cargoes. It will help India to increase its influence overseas,” Anand Sharma, director of the Mumbai-based Mantrana Maritime Advisory, told The Australian.
The establishment of IPG may also have been spurred on by China’s increasing investment in foreign ports, according to industry commentators. China’s development of port projects in Sri Lanka, Pakistan, Burma and Bangladesh has irritated India, according to the IFW report.
