Kamal Ghorui
By Jagannarayan Padmanabhan and Parul Singhal Garg Prioritising efficiency-linked incentives (ELI) and promoting compliance with Sustainable Development Goals (SDGs) are among key asks from Union Budget 2026-27 to help realise the country’s vision of transforming into a global maritime power.The Maritime India Vision (MIV) 2030 and Maritime Amrit Kaal Vision (MAKV) 2047 serve as a navigational chart for the vision. The MIV focuses on port modernisation and efficiency, while the MAKV sets a long-term agenda for a sustainable, green and technologically advanced maritime sector.
The port sector is at a crucial juncturePorts in the country handled 1,593.04 million tonne per annum traffic in fiscal 2025, clocking a compound annual growth rate (CAGR) of ~4% over last five fiscals. Meanwhile, port capacity increased to 2,762 million tonne. The MIV aims to increase port capacity to 3,000 million tonne by fiscal 2030. To increase the port capacity and also, cater to the advancements in shipping, development of mega ports (greater than 300 MTPA capacity with 18+ meter draft) is on the agenda. Planning and execution of greenfield ports at Vadhavan and Galathea Bay has started. Outer harbour developments at Paradip, Chennai, Tuticorin are expected to bring the existing ports to mega ports category. State governments such as Andhra Pradesh, West Bengal, Odisha, Karnataka are also in the process of developing greenfield ports which will add to overall port capacity in the country.The port capacity utilisation is at 57.7% at an overall level. Non-major ports are maintaining 65-68% capacity utilisation whereas major ports are at 50%. Increase in capacity utilisation by way of enhancing efficiency is required. This can happen by way of implementing multi-fold approach towards modernisation, use of technology, improvement in systems and processes etc., which would enhance traffic, leading to increase in capacity utilisation and revenue. The government can stimulate this by incentivising those ports which show result.While shipbuilding and allied infrastructure projects are seeing uptake across coastal states with the Maritime Development Fund set to provide long-term financing to expand shipbuilding capacity and tonnage, port connectivity infrastructure projects require greater push. The government has launched several policy initiatives for the port sector, including:
- Indian Ports Act 2025 – provides a unified legal framework
- Bill of Lading Act 2025 – emphasises electronic trade documentation
- One Nation One Port (ONOP) and Sagarmanthan – aimed at digitalisation and improvement of port processes
The government has also come up with Harit Sagar Green Port Guidelines for ports to align with SDGs. However, for implementation of green and sustainability initiatives, the ports would require government support.ELI can aid self-sufficiencyWhile asset monetisation to boost income is underway, improvement in efficiency can aid traffic growth and, in turn, increase revenue. Ports are working towards it. At major ports – their average turnaround time (TRT) almost halved from 96 hours in fiscal 2015 to 49.5 hours in fiscal 2025, pre-berthing detention (PBD) time (on port account) declined from 5.02 hours to 3.8 hours, and average output per ship berth day (OSBD) rose from 12,458 tonne to 18,304 tonne.To encourage efficiency at all ports, the budget could introduce an ELI scheme that offers financial rewards to ports and port operators for efficiency gains, such as lower TRT and PBD time and higher OSBD, with incentives tied to improvements over a base year. For the effective implementation of this scheme, a framework can be established to assess ports’ parameters at the end of each fiscal. This would enable the evaluation of improvements in key indicators and efficiency, leading to growth in port traffic and income.Budgetary allocation crucial for ports to comply with SDGsIndian ports are aligning with SDGs through initiatives such as ‘Harit Sagar: Green Port Guidelines.’ They are focusing on decarbonisation (30% emission cut by 2030), renewable energy (over 60% by 2030), electrification, biodiversity and circularity, aiming for carbon neutrality by 2035 and net-zero by 2047. The country’s port sector seeks to comply with the following SDGs:
- SDG 9 (industry, innovation and infrastructure): Resilient, sustainable port infrastructure (Project
Green Ports )
- SDG 14 (life below water): Protecting marine ecosystems through stricter regulations on illegal fishing and promotion of ocean sustainability
- SDG 7 (affordable and clean energy): Transitioning to clean energy sources in port operations
- SDG 13 (climate action): Contributing to net-zero goals through emission reduction
Achieving these goals requires substantial investment, and ports will need financial support. Non-compliance with these goals risks severe environmental damage, negative socio-economic impacts on coastal communities, loss of global trade competitiveness, and failure to meet national climate commitments.This makes budget allocation crucial to support ports in taking up sustainability and green port initiatives quickly. Thus, together, the twin steps—ELI and alignment with SDGs—can go a long way to catalyse growth and help the sector sail into a brighter future.(Jagannarayan Padmanabhan is Senior Director, Transport, Logistics and Mobility, Crisil. Parul Singhal Garg is Lead Infrastructure Specialist, Transport, Logistics and Mobility, Crisil)
