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ASEAN-India Maritime Connectivity Report


Academic year: 2023

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In 2011-12, India's container trade, both export and import, with most ASEAN countries slowed down mainly due to slow recovery of economies in the wake of the global financial crisis. Another form of cooperation is India's presence in the region and the construction of port infrastructure. India's shipping relationship with ASEAN is yet to be formally established.

However, Indian imports from ASEAN are relatively more diversified than Indian exports to ASEAN or ASEAN+3 countries. Thus, tonnage for overseas trade is 90 percent of India's GT compared to only 10 percent of tonnage used for coastal trade. In 2011-2012, India's containerized trade, both exports and imports, and most ASEAN countries slowed down mainly due to the slow recovery of the economies.

India's exports and imports of parts and components have grown moderately over the past decade. We have witnessed this normal trend except for India's exports to Malaysia and India's imports from Thailand. In the case of India's parts and components trade with Singapore, air transport would be more efficient than overland.

Table 2: India’s Trade Potential with ASEAN and ASEAN+3
Table 2: India’s Trade Potential with ASEAN and ASEAN+3

Maritime Routes (Container) between India and ASEAN

This is a weekly direct service from the west coast of India to Central China, Korea, Hong Kong, Singapore and Malaysia, operated with five ships of 2700-2900 TEU on a 35-day round trip schedule. This is a weekly direct service from North China to the West Coast of India with the following ports of call: Xingang-Qingdao-Laem Chabang-Singapore-Tanjung Pelepas-Port Kelang (North Port)-Port Kelang (West Port)-Nhava Sheva-Colombo - Port Kelang (North Port)-Port Kelang (West Port)-Singapore-Tanjung Pelepas. Transport costs and time go up significantly as we ship our freight via feeder routes to ports in Cambodia, Indonesia, Malaysia, Myanmar, Thailand and Vietnam, which have seen rapid growth in Indian trade.

Economic corridor-based multi-modal connectivity can be promoted, such as the Mekong-India Economic Corridor, which is designed to connect the Indian coast with the unexplored coast of Southeast Asia and beyond, in a shorter time and at a lower cost. . Given the relatively low participation of Indian ships in India's trade with Southeast and East Asia and given the fact that Indian ships are ageing, there is an urgent need to increase the shipping fleet so that it is at least sufficiently large enough to meet India's trade volumes with ASEAN and beyond. Several ASEAN and EAS countries such as Singapore have the resources to meet India's shipping requirements.

However, limited commercial analysis by the National Transport Development Policy Committee (NTDPC) suggests some possible locations (Gujarat being the main area) based on the expected port traffic of POL and coal in the next two decades. According to NTDPC report, a possible location is at the southern end of the Maharashtra coast, which can be used to serve Goa and Karnataka. Orissa, Andhra Pradesh and Tamil Nadu are potential states for the mega ports on the east coast.

ASEAN is one of the most important regions in world trade, but its economic relationship with India is still limited. Previously, ASEAN-India trade was mainly via sea routes, with land transport linking major urban centres. Overland route along the Trilateral Highway (TH)/Asian Highway (AH1) connecting Thailand, Myanmar and India.

Some of the existing ports on the east coast with deeper draft (suitable for the development of mega ports) are Gangavaram (Andhra Pradesh), Paradip (Orissa) and Ennore (Tamil Nadu). Site selection for locating megaports requires data on all types of port traffic (containers and other cargo) and the cost of developing candidate ports.

Table 20: Container Liner Service between India and ASEAN+3*
Table 20: Container Liner Service between India and ASEAN+3*

Proposed Shipping Routes (Container) between ASEAN and India’s East Coast

However, there will be more services between ASEAN and India in the Bay of Bengal and between ports on the east coast of India and the west coast of ASEAN. Cooperation in maritime transport is therefore one of the main areas for promoting relations between India and Southeast and East Asia. A breakdown of freight transport services tells us about India's large import of other maritime transport services ($35.75 billion in 2012 in Table 22), which contributes to the deficit in transport services.31 In a growing economy like India, international merchandise trade is highly dependent from foreign ships for transport around the world and thus in 2012 generated almost 59 percent of the payment for the import of transport services.

For example, India's sea freight exports were around USD 7.22 billion in 2012, up from USD. In a static sense, the massive deficit in sea freight transport services weakens India's maritime position. In contrast, the age profile of the world fleet (according to the Review of Maritime Transport 2010) reflects that more than 50 percent of the global tonnage was less than nine years old.

Source: Report of the Working Group on Ports and Shipping for the National Transport Development Policy Committee, Ministry of Shipping (2012). The share of Indian registered ships in carrying India's overseas merchandise trade has fallen to around 8 percent. Operational efficiency of the ports must therefore be competitive and on par with the best ports in the world.

India may also explore the development of Dawei port and SEZ project in Myanmar in JV. This link will connect the Chennai region to the rest of the world through its maritime infrastructure. 7 The agreement has provided flexibility for India and ASEAN countries to exclude certain products from tariff concessions or eliminations to address their respective domestic sensitivities.

17 About 95 percent of India's trade by volume and 68 percent by value is carried by sea. Of these, 356 ships with 9.37 million GT cater to India's overseas trade and the rest to coastal trade (Indian National Shipping Association (INSA), Mumbai).

Table 21: Trends in Liner Shipping Connectivity Index
Table 21: Trends in Liner Shipping Connectivity Index

Tariff Equivalents of PCBs (%)*

Major and Intermediate Ports of India

Trends in Total Cargo Handled

Major Ports of ASEAN

Rank of ASEAN+4 Ports by Container Cargo Volume

India’s Non-Containerised Trade with ASEAN+4, 2011-12 (a) Import

Container Liners Serving India

Key Agencies in Singapore Maritime Sector

On behalf of the ASEAN-India Center and our co-sponsor, the Indian National Shipowner's Association, I would like to welcome all distinguished speakers and participants to this national seminar on India-ASEAN maritime transport cooperation. On behalf of the ASEAN-India Center I would like to sincerely thank him for honoring this seminar with his presence and for agreeing to inaugurate this seminar and for sharing with us his vision of India-ASEAN relations and the challenge of connectivity, in the broadest sense of the word, between the two friendly and strategic partners. The ASEAN-India Center was established at RIS following a decision taken by the Heads of State and Government at the India-ASEAN Commemorative Summit in December 2012.

The ASEAN Connectivity Coordinating Committee (ACCC) has opened a comprehensive dialogue with India in 2013 to improve comprehensive connectivity between India and ASEAN countries. Against this backdrop, the ASEAN-India Center at RIS decided to focus attention on the maritime links between our India and its ASEAN partners. It gives me great pleasure to be with you today to discuss the key elements for strengthening India's maritime connectivity with the ASEAN region.

This is an important element of the ASEAN-India connectivity agenda and will not only impact the volume of trade across our maritime routes but also support and strengthen land connectivity in the region. I commend the ASEAN India Center for organizing this discussion and for bringing together some of the key stakeholders in India's maritime transport infrastructure in this space. Connectivity will remain one of the key priorities of the ASEAN-India strategic partnership in the coming months and it is important that we discuss, analyze and synthesize.

In the course of last year, India became the third partner country of the ASEAN, after China and Japan, to start formal discussion on connectivity with the ASEAN Connectivity Coordinating Committee (ACCC). Any assessment of the strengthening of maritime ties between ASEAN and India must also take note of the mega-regional agreements and arrangements that are taking shape within the ASEAN countries. Japan is giving a clearly visible and concerted push to strengthen its maritime ties not only in the ASEAN region, especially Myanmar, but also with India.

This topic, as I mentioned earlier, is part of our discussions with the ASEAN Connectivity Coordinating Committee and the agenda of the ASEAN Plus Maritime Transport Working Group. Once again, I would like to commend the ASEAN-India Center for convening excellent sessions and panels for such a discussion.

Seshadri Vice Chairman, RIS

The ASEAN-India Center in collaboration with the Indian National Shipowners' Association (INSA), Mumbai, organized a national seminar on ASEAN-India maritime transport cooperation in New Delhi on 31 January 2014. There were three technical sessions on the ASEAN-India FTA, RCEP, the ASEAN-India ports and shipping networks and the emerging challenges of ASEAN-India maritime transport cooperation. Indian shipping carries only a limited portion of India's maritime trade, which is concerning.

She also said that the supply chain will play an important role in improving trade in both agreements. Vishwanath said in his presentation that there is confusion among the companies related to the interpretation of MFNs and preferential tariffs. Vishwanath suggested increasing the capacity of the ports, better connectivity through roads and railways, creating a process of free movement of goods across the countries and having the uniformity of the HS codes so that the businesses can benefit from the ASEAN-India FTA.

Prabir De in his presentation stated that trade in parts and components between ASEAN and India has grown rapidly. Sahani in his presentation suggested following the PPP model for the development of the Indian ports sector. Singh in his presentation stated that India is not making adequate use of its rivers and inland waterways.

Subrata Behera in his presentation stated that Kaladan Multi-modal Transit Transport Project (KMTTP) has been implemented due to strategic reasons. Manoj Singh in his presentation said that huge investment will be needed to develop good transport in Northeast India. GVL Satya Kumar focused in his presentation on the role of ports as a starting point between India and the ASEAN countries.

He highlighted the improvement of sea connectivity and further said that discount should be provided in connection with ships to encourage sea transport. Umesh Grover in his presentation urged the Government of India to stimulate coastal shipping as imposition of taxes has hurt the shipping business in India.

ASEAN-India Centre at RIS


Table 2: India’s Trade Potential with ASEAN and ASEAN+3
Table 4: Export Effects of TPP, RCEP, and FTAAP
Table 5 (b) continued...
Table 5 (b) continued...


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