Day 32 – Q 2.What is the Sagarmala project? What are its economic and strategic implications for India?

2. What is the Sagarmala project? What are its economic and strategic implications for India? 

सागरमाला परियोजना क्या है? भारत के लिए इसके आर्थिक और रणनीतिक निहितार्थ क्या हैं?

Introduction:

In order to achieve port led development and develop coastal regions of country, government took up a unique initiative called Sagarmala project. It aims to exploit the Blue economy to achieve high growth and development of country.

Body

Components

• Port Modernization & New Port Development – extending the capacity of existing ports and developing new ports
• Port Connectivity Enhancement – improving port-hinterland connectivity, optimizing cost and time of cargo movement through multi-modal logistics solutions including domestic waterways
• Port-linked Industrialization – Developing industrial clusters close to ports and developing Coastal Economic Zones
• Coastal Community Development – Promoting sustainable development of coastal communities through skill development & livelihood generation activities, fisheries development, coastal tourism, etc.

Need for Sagarmala:

• India has a 7,517 km (4,670.84 miles) long coastline, 14,500 km (9,010 miles) of potentially navigable waterways, and strategic locations along major international maritime trade routes. 
• Yet, the country has been unable to capitalize on its geography due to infrastructural and operational deficiencies.
• Data shows that despite its long coastline, India’s coasts only contribute to 15 percent of national trade activity.
• For instance, the turnaround time (TAT) at major Indian ports in 2014-15 was about four days; the global benchmark is an average of 1-2 days.

Economic implications:

• Port development and modernization: New port infrastructure like better handling capacity, modernization etc will help improve the turnaround time of ships (From 2015-16 to 2017-18, it got reduced by 25%).
• Infrastructure- Development new infrastructure like new ports, road connectivity to ports, coastal economic zones (CEZs), multi-modal logistics parks etc.
• Reduced logistics cost- At present, logistics cost in the country is in the range of 14-16 per cent against 8-10 per cent in other countries. Sagarmala can help reduce these costs.
• Inter-connectivity: It leads to inter-connection between roadways, railways, water ways and airways, thus reducing the overall cost of transportation as well as improving connectivity.
• Employment: Provides employment opportunity to coastal area people and increase their standard of living. It is estimated to create an estimated 10 million new jobs (four million in direct employment).
• Development: Will help in development of regions around ports by increase in investment, new sectors presence like manufacturing, services etc.
• Efficiency: Will reduce the cost of transportation and make India a new transit hub. Developing rivers as inland waterways can also help save domestic logistics costs too.
• Export competitiveness- Sagarmala could help the country and industrial to gain competitive advantage compared to its neighbors. It is expected to boost India’s merchandise exports to $110 billion by 2025 
• Power sector- The project aims to shift the movement of coal to the coastal route, which would cut down electricity costs by up to 35 percent, especially for coastal power plants in Andhra Pradesh and Karnataka, which receive coal by rail networks.
• Blue economy: Developed coastal infrastructure, livelihood development of coastal communities, exploitation of ocean resources will help improve India’s Blue economy.
• FDI: It will also help in attracting foreign container companies to set up their facilities.

Strategic implications:

• Coastal security: It also enhances coastal security along with economic development.
• Check Chinese intrusion- The project is an effective way to counter China’s Belt and Road Initiative (BRI) in the Indian Ocean region (IOR).
• ASEAN- With increasing ties with ASEAN countries, the importance of ports and port infrastructure further increases and Sagarmala can help address it.
• Efficiency: Will reduce in cost of transportation and make India a new transit hub.

Conclusion

Sagarmala project not only helps in port led development and trade but it will also enhance employment opportunity, increase foreign exchange earnings for country. The Britain ruled the world due to its Maritime power, India aiming for superpower status can utilize this opportunity to project its might among world countries.