State of the Economy . How will the transshipment port at Great Nicobar Island help India’s logistics sector?

The Centre has decided to construct an international container transshipment port at Great Nicobar Island, at a cost of approximately RS. 41,000 crore. In this State of the Economy Podcast, businessline’s T E Raja Simhan speaks to Jagannarayan Padmanabhan, Senior Director and Global Head of Transport, Logistics and Mobility, CRISIL, about the Great Nicobar Island project and the way forward for the logistics sector. 

Padmanabhan explains the vital role of transshipment in India’s aspirations to become a $ 5 trillion economy. He emphasises the importance of optimising logistics and reducing costs for trade, underscoring the strategic need for a transshipment port to facilitate these goals. The speaker also mentions the growing size of container ships, highlighting how larger vessels can significantly reduce transportation costs.

Padmanabhan acknowledges challenges such as environmental concerns, funding requirements for a greenfield project, skill development, and ecological impact. He sees the Nicobar Island project as a long-term endeavour, spanning a decade or more, to ensure it aligns with India’s evolving economic landscape.

He underscores the geopolitical importance of securing trade routes and suggests that multiple ports will serve different shipping lines, each potentially adopting a specific port for their operations.

Jagannarayan analyses the feasibility of generating substantial container traffic for the new port, suggesting a gradual increase in capacity based on India’s economic growth trajectory. He discusses the potential for a variety of cargo types, such as bulk and liquid, while emphasising that containers remain the primary focus due to their cost-saving and trade-securing advantages. He discusses the transformative potential of the port and sees it contributing to cost reduction, trade security, and increased containerisation of cargo. Listen to the podcast!  

(Host: T E Raja Simhan, Producers: Anjana PV & Siddharth MC)

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.

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