Sagarmala Project - How it will change logistics for India?

23 October 2022

Sagarmala Project - How It Will Change Logistics for India?

The Sagarmala Project, launched by the Government of India in 2015, is a visionary initiative aimed at transforming India’s coastline into a thriving economic corridor. With over 7,500 kilometers of coastline, the project seeks to utilize this vast resource to streamline cargo transportation, enhance infrastructure, and significantly reduce logistical costs for both domestic and export-import (EXIM) trade.

Introduction to the Sagarmala Project

In 2015, the Union Cabinet gave its approval to the Sagarmala Programme, a strategic initiative with the goal of developing India’s port infrastructure through modernization, mechanization, and computerization. The overarching objective is to lower logistical costs and make India’s ports more competitive on the global stage.

The Sagarmala Project is a significant step towards improving infrastructure for seamless cargo transport. With 500 identified projects, the total infrastructure investment is estimated at Rs. 3.55 billion. As of now, 143 projects worth Rs. 0.88 billion have been completed, while 190 projects worth Rs. 2.12 billion are under development. The remaining projects are in various stages, with a planned completion timeline extending until 2035.

What is the Sagarmala Project?

Launched in 2015, the Sagarmala Programme aims to develop port infrastructure across India’s 7,516 kilometers of coastline.
The goal is to reduce logistics costs for both domestic and EXIM trade, ensuring that infrastructure investment is optimized for maximum output.
By 2025, the project is expected to increase India's exports to USD 110 billion and create around 10 million jobs (4 million of which will be direct employment).
Additionally, the Ministry has launched the Sagarmala Seaplane Services (SSPS) Project, an ambitious initiative to bring air transport into the logistics mix.

Key Components of the Sagarmala Programme

The Sagarmala Programme comprises various interconnected components that will collectively improve India's port infrastructure and logistics systems. The main pillars include:

Port Modernization & New Port Development:
- Focuses on increasing the capacities of existing ports and developing new ports, especially greenfield ones, to decongest and enhance operational efficiency.
Port Connectivity Enhancement:
- Enhancing the connectivity between ports and inland areas through the development of multi-modal logistics, utilizing inland waterways and coastal shipping to improve cargo movement.
Port-linked Industrialization:
- Establishing Coastal Economic Zones (CEZs) and industrial clusters near ports to minimize shipping costs, improve efficiency, and foster industrial growth.
Coastal Community Development:
- Promoting sustainable development in coastal communities, including job creation, development of fisheries, and boosting coastal tourism.
Coastal Shipping & Inland Waterways Transport:
- Encouraging the use of inland waterways and coastal rivers for cargo transportation, a more environmentally-friendly option compared to traditional road and rail networks.

Sagarmala Project Objectives

The primary goal of the Sagarmala Project is to significantly reduce EXIM logistics costs. Some specific objectives include:

Reducing domestic cargo transportation costs by optimizing the mix of transportation modes (rail, road, water).
Locating industrial sites near ports to reduce the logistics costs of bulk goods.
Developing manufacturing clusters close to ports to improve export competitiveness.
Minimizing time costs associated with container movement between export and import.
The project aims to create 40 lakh direct jobs and 60 lakh indirect jobs, thus contributing to economic growth and employment.

The Role of Sagarmala Development Company Limited (SDCL)

The Sagarmala Development Company Limited (SDCL), established in 2016, plays a crucial role in implementing the Sagarmala Programme. It is responsible for:

Developing and formulating projects as per the National Perspective Plan (NPP).
Supporting Special Purpose Vehicles (SPVs) set up by state or federal bodies for Sagarmala-related projects.
Raising funds for projects and providing financial assistance to projects that align with the Sagarmala framework.
Creating detailed master plans for selected Coastal Economic Zones (CEZs) under the NPP.

Coastal Economic Zones (CEZs)

The National Perspective Plan (NPP) for the entire coastline identifies areas that could become Coastal Economic Zones (CEZs). These zones are expected to become hubs for industrial growth, job creation, and infrastructure development. With the Sagarmala Project in place, living conditions in CEZs will see significant improvements, benefiting local communities.

Conclusion

The Sagarmala Project is set to revolutionize India’s logistics landscape by tapping into the economic potential of the nation’s coastline. With improved ports, better connectivity, and a focus on industrialization and community development, the project promises to reduce logistical costs, enhance India’s competitiveness in global trade, and create millions of jobs.

As the implementation of this vast project continues, India’s ports will be better positioned to cater to the demands of modern trade, thereby unlocking new avenues for economic growth and improving the quality of life for millions of people living along the coastline.

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