<div>A couple of years ago, India grandly decided to double its exports. After much fanfare and tomtomming, many complex strategies were announced. A product country matrix was formed. Several new trade agreements were promised. The government though neglected a tiny detail, ports. Not surprising then exports are barely growing. And the target looks tough to achieve. <br /><br />The commerce ministry is quick to blame the slump in global markets. But that is the easy answer. The tougher answer is the government’s inability to increase its port and shipping capacity. <br /><br />Let’s take a look at exports figures before we come to port capacity. <br /><br />The commerce ministry set a target of crossing $400 billion of exports by 2013-14. But a quick look at figures show that India is nowhere close to achieving the target. This fiscal, exports are unlikely to reach $360 billion. So a figure of over $400 billion will be tough to reach next year.<br /><br />Meanwhile the government continues to sign free trade and preferential trade agreements with various countries and blocs. Currently there are about 20 such agreements in place. And more such pacts are under negotiation. Will these pacts be able to accelerated India’s trade with the world? They could have. And they should have. <br /><br />Except India’s ability to ship goods remains woefully inadequate. The Planning Commission estimated that port capacity should double to 2003 million tons (MT) per year by 2017 to meet increased trade. Currently the capacity is about 1200 MT. <br /><br />But fresh investment in the sector is mostly stagnant. Regulatory clearances, lack of clarity in revenue sharing agreements and slow decision making have held up many new projects. Even existing projects are awaiting security clearances for expansion. Port companies are grappling with revenue sharing and tariff rules set by the central Tariff Authority for Major Ports (TAMP). Not only does the industry have high discomfort level with TAMP, it covers only 12 major ports. There are over 187 smaller ports that are controlled by state governments. <br /><br />A fresh attempt to improve regulation in the sector is expected through the Port Regulatory Authority Bill that remains pending. Under this framework, a central regulator would set the framework for state level regulators. But the nine maritime states that administer the tariffs for the smaller ports are opposing a central regulator. While this can streamline tariff setting and increase <br />competition, states say this will impinge on their powers. <br /><br />This discord means that congestion is growing rapidly at ports. Turnaround time for ships at Indian ports is among the highest in the world. While countries like Singapore allow a ship to offload and load within a day, it takes 3-4 days at Indian ports. Close to 95 per cent of global merchandise trade is done through sea routes in India. <br /><br />This staggering dependence on ports should have ensures that the Ministry of Shipping take urgent measures to resolve the issues and move ahead with reforms. But most investors and exporters are disappointed with the pace of change. <br /><br />Port regulation and capacity will have to be expedited through an inter-ministerial initiative, if the government wants any meaningful results from trade agreements. Without comprehensive effort by central and state governments, exports and domestic growth targets will remain targets. <br /><br />(Pranjal Sharma is a senior business writer. He can be contacted at pranjalx@gmail.com)<br /> </div>
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