Boston, MA -- (SBWIRE) -- 07/24/2012 -- The primary issue in Indian shipping continues to be the state of the nation's ports. Investment in the 12 'major' state-run facilities has not kept up with the demand engendered by the rapid economic growth experienced in India over the past decade. This is leading to repeated issues of congestion in the ports; investment is now being made, but this may be a case of too little too late. The contrast between these creaking facilities and the newly built private ports which are increasing in number around the country is stark.

Headline Industry Data

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- 2012/13 Port of Kandla tonnage throughput forecast to grow 10.8%, and to average 9.1% to 2016/17.
- 2012/13 Port of Jawaharlal Nehru container throughput forecast to grow 7.2%, and to average 7.6% per annum to the end of our forecast period.
- 2012/13 trade real growth forecast at 7.0%, and to average 9.1% to 2016/17.

Key Industry Trends

Private Indian Ports To Outperform In 2012

BMI believes that growth at India's private ports will continue to outpace the established 'major' ports in 2012. The new facilities benefit from space to grow, newer infrastructure and equipment, and less tangled bureaucracy than the state-run traditional ports. Investment in the major ports is increasing, however, which should help combat the rising problems of congestion.

Paradip Suffers Second Year Of Declines As Iron Ore Exports Slump

BMI believes that the Paradip Port Trust will be disappointed that the Port of Paradip did not manage to meet its total tonnage handling target of 63mn tonnes in the year ended March 31 2012. We note that the disappointing tonnage throughput results recorded at the port, located on India's east coast in the state of Orissa, are largely as a result of the ongoing difficulties involved in exporting iron ore from the BRIC country. We believe the facility will regain lost volumes in the medium term. In light of this growth outlook, the plans by the Port of Paradip to raise its annual handling capacity are prudent.

Indian Insurers To Indemnify Iranian Imports

Indian shipping companies will be relieved by the fact that state-run insurers have agreed to provide limited cover to vessels carrying Iranian crude oil to the country. Nevertheless, Indian imports will be much reduced and operators will have to find alternative cargoes. Should these be found, the effect could be a positive one if the total tonne-mile of the journey is increased.

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