Indian infrastructure "tycoon" creates a shocking miracle: Changing the flow of world goods, hoping to win a "lucrative piece of cake" from China

With the newly inaugurated port, India is one step closer on the ambitious path of becoming "the world's factory".

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Historical milestone

When the Zhen Hua 15 - a heavy cargo ship sailing from the East China Sea - unloaded its cargo at Vizhinjam port on October 15, it put India on the map of countries that can host the largest container ships. world. This is the first time India has welcomed such a large ship, all thanks to the newly inaugurated Vizhinjam port.

Located near the southern tip of the country, the Vizhinjam transshipment container port – the first transshipment container port in India to become operational on October 15 – will enable India to gain a larger share of the country's maritime trade. The economy is currently dominated by China. The port will also boost India's ambitions to become a manufacturing hub by reducing logistics costs for goods to and from the country.

The new port is a project built by a group owned by billionaire Gautam Adani. Following the Adani empire's flagship and sprawling investments across ports, mines, airports and power facilities, Vizhinjam will further cement the billionaire's position as the “infrastructure king floor of India”.

Its proximity to international shipping routes (accounting for 30% of global cargo traffic) and a natural canal up to 24 meters below sea level make Vizhinjam an ideal hub for some of the world's largest ships. world visits. In the past, container ships bypassed India because the country's harbors were not deep enough to accommodate such ships and chose to dock at neighboring ports such as Colombo, Dubai and Singapore.

Transshipment is the transfer of goods from an original ship to a larger mother ship at a port en route to the goods' final destination.

Vizhinjam deep water port is located along the beautiful coastline of Kerala. The port has been developed through collaboration between Adani Ports & SEZ company and the local state government. Adani Ports, India's largest private sector port operator with a 30% market share, is also developing Israel's Haifa port as part of the company's global expansion plan.

“The Indian Ocean accounts for 50% of seaborne trade,” said Chakri Lokapriya, chief investment officer at TCG Asset Management in Mumbai. Vizhinjam Port with its natural advantages will improve operating profits for Adani Ports.”

In a 2022 report, the Reserve Bank of India said poor transport connectivity has hindered India's integration into global value chains. According to a February 7 statement, India's container traffic only reached 17 million TEUs in 2020 compared to China's 245 million TEUs.

The government led by Prime Minister Narendra Modi told parliament that could soon change.

“The world's factory”

“The upcoming ports at Vizhinjam (Kerala) and Vadhavan (Maharashtra) with natural depths of over 18 meters will allow super-large container and cargo ships to call at the ports, thereby accelerating efforts to turn India into a factory for world through improving container and cargo transportation,” an Indian government agency said.

Vizhinjam Port, according to the Adani Ports website, will provide services to ships including Megamax container ships. It will have a capacity of 1 million TEU in the first phase with an investment of 77 billion rupees ($925 million). About 6.2 million TEU will be added in the next phases.

However, operating a transshipment container terminal will not be an easy task, even for an experienced company like Adani Ports. The transit center also needs to be connected by road and rail networks to warehouses and factories inland. Lack of such lifeline connections “could be disastrous” for any Which port?

Critical position

The government is implementing the India Maritime Vision 2030 program which seeks to develop major ports, transshipment hubs and modernize world-class infrastructure with an estimated investment of 1,000 yuan. 25 trillion rupees (about 15 billion USD).

As large ships become more important to European and Chinese trade, India could tap into that route, thanks to its strategic location between the Suez Canal and the Strait of Malacca.

India's current container traffic is less than 10% of China's, but if Vizhinjam port can attract more ships, it will give India - and Adani Port - a stronger foothold in global maritime trade. demand, Bloomberg commented.