India’s announcement that it is to shelve plans to privatise its major container ports could lead to a shake-up of container port options in the region in the medium term, according to the U.K.-based shipping analyst Drewry.
The government has based the decision on improved port performance that has, in its view, negated the need for a mass sell-off. Instead, India will change existing laws governing ports to make them more profitable and efficient.
Private ports in India have been winning volumes from major public ports on the back of ongoing labour disputes, red tape and inefficiencies at the latter, according to Drewry. If the Indian government can deliver on its pledge to significantly reduce these blocks, carriers may be tempted to switch allegiances in Indian ports.
The need for additional and efficient port capacity in the region is evident from the steady traffic volumes on the eastbound Europe to Middle East/South Asia trade.
Drewry says that the Indian public port U-turn could shake up South Asia trade as more investment in state-owned ports would widen terminal choices in the region and better serve steady traffic flows.