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Tue 23 Aug 2011 10:06 AM

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India plans to invest $7.6bn in ports to boost trade

Dubai’s DP World among firms that have invested in Indian ports to tap trade

India plans to invest $7.6bn in ports to boost trade
A container ship is unloaded at India’s Mundra Port and Special Economic Zone

India aims to construct seven new ports for 350 billion
rupees ($7.6bn) by 2017 to support the nation’s plan to more than triple
merchandise exports.

“The government has to lead the way in creating port
capacity given the growth in trade,” Rakesh Srivastava, joint secretary at the
Ministry of Shipping, said Monday in a telephone interview in New Delhi.

“Private sector is welcome, but the government won’t give up
its responsibility.”

About two-thirds of the funds for the new facilities will be
raised from private sector, he said. APM Terminals, the container-terminal arm
of AP Moeller-Maersk, and Dubai-based DP World are among the companies that
have invested in ports in India to benefit from a surge in trade.

The government has sent the proposal for the new ports to
seven Indian states, Srivastava said without specifying a timeframe for
starting the projects. The plan requires the states to set aside about 2,500
acres of land for each harbour.

“More ports will definitely help remove trade bottlenecks,”
said Rahul R. Pathak, principal consultant at Mumbai-based Mantrana Maritime
Advisory, which provides consulting to shipping lines and port operators. “But
the government has to ensure that they all don’t end up competing for the same
basket of goods.”

India currently has 13 so-called major ports that are
administered by the federal government. They together handled 561 million tons
of cargo in the year ended in March 2010, according to official data.

The government plans to boost the major ports’ annual
capacity to 1.46 billion tons by March 2020 from 616.7 million tons as of
March, 2010, according to the shipping ministry. About 90 percent of India’s
international trade by volume is carried through sea.

Asia’s third-largest economy aims to triple its merchandise
exports to $750bn by March 2017 from $225bn last year, according to the trade
ministry.

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