Setting up a Maritime Cluster at GIFT City, Gandhinagar. Ports, Ports Services and Logistics Government of Gujarat

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1 Setting up a Maritime Cluster at GIFT City, Gandhinagar Ports, Ports Services and Logistics Government of Gujarat

2 Contents Project Concept 3 Market Potential 6 Growth Drivers 11 Gujarat Competitive Advantage 12 Project Information 14 - Location/ Size - Infrastructure Availability/ Connectivity - Raw Material/ Manpower - Potential Collaboration / Key Maritime Clusters - Key Stakeholders - Key Considerations Project Financials 21 Approvals & Incentives 22 Key Department Contacts 24 Page 2

3 Project Concept Overview A Maritime Cluster can be broadly defined as a group or agglomeration of firms, institutions, business and other industry players in the maritime sector that are geographically located close to each other and thereby enjoy positive synergy between their activities. The cluster approach concerns interconnected companies, specialized suppliers, service providers, and firms in related industries. The aim is to create Complete Ecosystems of Port/Shipping services within state to make its ports more attractive & competent. The intent is to develop soft maritime infrastructure and services in Gujarat like Shipping agents, Ship owners, Shipping agencies, Ship Manning and Chandlers, Shipping finance & insurance, classification and Registers of Ships etc. Jakhau Mundra Navlakhi Bedi Sikka Okha Positra Bhavnagar Kutchhigarh Mithivirdi Porbandar Mahuva Pipavav Veraval Jafrabad Chhara Private Sector Ports Dahej Magdalla Hazira Vansi Borsi Nargol GMB Ports Source: EY Analysis The objective of the cluster would be to provide world class infrastructure to members, along with assisting the members in professional conduct to market the cluster as a center for excellence. It is envisaged that the cluster would have globally competitive tax structure, opportunities for professional development through seminars and conferences with global shipping entities and world class office infrastructure. The cluster is also expected to provide a fillip for business opportunities to members, with presence of asset owners and service providers. Page 3

Project Concept Currently most of these services are located near Mumbai.

Hence, a Cluster Approach is needed in development of a competitive maritime service base in India.

Dubai, Rotterdam, London, Singapore, Hong Kong, Hamburg etc. Mostly, these clusters are characterized by the presence of soft maritime infrastructure.

4 Project Concept Currently most of these services are located near Mumbai. Whatever limited maritime services India offers, are scattered around different locations. Hence, a Cluster Approach is needed in development of a competitive maritime service base in India. Moreover it is the need of the hour to make a paradigm shift from traditional approach to Modern approach which is only possible by changing the current mindset and looking beyond the obvious. The concept of maritime commerce/service cluster is more in line with the traditional cluster concept which is popular in other maritime regions like Colombo, Dubai, Rotterdam, London, Singapore, Hong Kong, Hamburg etc. Mostly, these clusters are characterized by the presence of soft maritime infrastructure. These clusters are basically a concentration of maritime related services provided by shipping agents, ship owners, ship manning and chandlers, shipping finance & insurance, classification and registers of ships, maritime education institutes etc. Regulators (Classification Service, IMO, Government) Shipping (Ship Owners, Charterers, Brokers) Support Services (Maritime Education, Research, Media, Manning Agencies) Maritime Cluster Intermediate Services (Insurers, Legal Advisors, Consultants, Bankers) Industry Association Page 4

5 Project Concept Need of Cluster Approach Ports and shipping sector is the backbone of the logistics sector. With the recent initiatives of the Government of India, port and shipping sector is expected to be in the growth mode for the coming years. There are several drivers of the port development that are expected to drive the growth of the sector. Growth of Maritime Stakeholders in Gujarat Promotion of Gujarat as Maritime Powerhouse Cluster to provide enabling environment and distinct identity Need for diversifying operations Growth of Maritime Stakeholders in Gujarat Promotion of Gujarat as Maritime Powerhouse Cluster to provide enabling environment and distinct identity Need for diversifying operations What Indian Maritime Sector Misses due to Nonavailability of a Cluster The Indian Maritime Sector misses out on enumerable parameters due to Non-availability of a Cluster. Some of are as enlisted below: Lack of professional approach Difficult to provide geography based incentives Underdevelo ped services sector Sectorial Cluster drives sector development Indian Maritime Sector lacks recognition and brand Loss to the Indian Economy With the development of infrastructure in this sector, the softer aspects like the maritime services, maritime brand etc. is also required to be established. Due to high growth in trade, Indian shipping industry has grown many folds in the last few years. Indian shipping industry now consists of several players including Government ports, private ports, ship-owners, charterers, brokers, forwarders, agents, ship chandlers, surveyors, manning agents, ship managers, ship operators, maritime lawyers, shipping consultants, and several other service providers. Page 5

6 Market Potential Mumbai Maritime Hub The maritime cluster approach is not a new concept, though it is relatively new to India. Mumbai houses companies across the value chain in the maritime industry starting right from, specialized suppliers and service providers to interconnected companies and firms in related industries. The major push & pull factor for the companies to set up their base in Mumbai revolves around the City being the Commercial capital of India providing proximity to financial and commercial market & trade. Mumbai is home to maritime service providers vis-à-vis Ship Agents / Brokers, Ship Charterers, Ship Chandlers, Ship Owners, Ship Managers, Ship Finance Companies, Maritime Consultants, Legal Services and Maritime Institutes. Though Mumbai is considered to be the maritime hub with presence of industries across complete value chain, it actually doesn t follow a cluster based approach having presence of industry players geographically located close to each other with a particular development model in place and in predefined space. Page 6

Market Potential Key Maritime Clusters Singapore Maritime Cluster The Singapore maritime cluster is semi

Correct government incentive with proper timing ensured the emergence of the cluster as a global maritime

Dubai Maritime Cluster/DMCC (Dubai Multi Commodity Centre) - JLT The Dubai maritime cluster has developed

The Dubai Maritime City was merged with the Commodity Cluster scaling new heights in the past few years.

7 Market Potential Key Maritime Clusters Singapore Maritime Cluster The Singapore maritime cluster is semi organic, owing its growth to a combination of government, industry and organic growth of trade. Correct government incentive with proper timing ensured the emergence of the cluster as a global maritime centre. Dubai Maritime Cluster/DMCC (Dubai Multi Commodity Centre) - JLT The Dubai maritime cluster has developed inorganically by the promoters spending their way to establish the cluster. The Dubai Maritime City was merged with the Commodity Cluster scaling new heights in the past few years. DMCC/JLT has developed state of the art facilities for conducting global business, including paperless online company creation and registration, most visa and administrative work conducted approved online and efficient trained call centre. Page 7

Market Potential Key Maritime Clusters Switzerland Maritime Cluster The Swiss Cluster has developed on the back of massive capital formation in Swiss banks, resulting in large global trading houses

8 Market Potential Key Maritime Clusters Switzerland Maritime Cluster The Swiss Cluster has developed on the back of massive capital formation in Swiss banks, resulting in large global trading houses setting up base in Switzerland. The target market for Swiss cluster is large trading and investment companies, who can leverage the capital formed in Swiss banks and create global shipping groups. The London Maritime Cluster / The Baltic Exchange The London maritime cluster is one of oldest and historic maritime clusters. It is probably the only organic global cluster in the maritime world. The cluster evolved organically over a period of time, and almost all global shipping practices and legal framework can be traced back to London. Page 8

Market Potential Benefits of Maritime Cluster It will fuel and support maritime trade in Gujarat and India in long run.

The maritime research, development and innovation will be the focal point going by current trends which navigates around implementing risk based approaches, reduction in major accident risks,

Maritime Trade in Gujarat Compliment Maritime Services to Gujarat Ports Opportunities to Youth Maritime Sector Fuel & Support Maritime University Cost Effective & Timely Supply Employment

finance, marine law firms and marine insurance.

9 Market Potential Benefits of Maritime Cluster It will fuel and support maritime trade in Gujarat and India in long run. Creation and incubation of platforms with requisite skills and capital to trade in global shipping markets and profit from same. The maritime research, development and innovation will be the focal point going by current trends which navigates around implementing risk based approaches, reduction in major accident risks, implement life-cycle information management, improve ship capacity & flexibility, reduce environmental impact and costs. Maritime Trade in Gujarat Compliment Maritime Services to Gujarat Ports Opportunities to Youth Maritime Sector Fuel & Support Maritime University Cost Effective & Timely Supply Employment Awareness Creation of an ecosystem to support world class global shipping platforms which are mutually interdependent for success and business, with services like freight hedging, shipping finance, marine law firms and marine insurance. Creation of wealth through inflow of global capital to invest in shipping platforms in the cluster It also provides GMB with cost effective and timely supply of Maritime Services to Gujarat Ports Greater Employment opportunities to local Youth. As a centre of maritime service, it would also complement the Proposed Maritime University project. Greater awareness towards, Shipping Industry would be generated, which otherwise is known as a Silent Sector of the economy whose contribution to the economy is tremendous yet goes unnoticed. Page 9

The cluster is expected to attract port operators, ship liners, charterers, brokers, law firms, banks, technical consultants,

10 Market Potential Demand Assessment The cluster would attract various players from India and across the world based on the incentives being offered. The cluster is expected to attract port operators, ship liners, charterers, brokers, law firms, banks, technical consultants, manning firms, ship owners etc. as indicated in the following diagram. Demand vis-à-vis Timeframe 1-3 Years 4-7 Years 7-10 Years Years Stage I Stage II Stage III Stage IV 1,20,000 Sq. ft. 2,00,000 Sq. ft. 1,30,000 Sq. ft. 1,50,000 Sq. ft. Page 10

Growth Drivers Gujarat acts as a gateway to West and to major states across India Strategic Location India s longest coastline of 1,600 km Highest number of commercial cargo ports Nearest maritime

Gulf of Khambhat and Gulf of Kutch provide natural navigational safety Handled ~ 40% of national maritime trade in FY15 Multiple Choice Multiple choice of ports along with wide range of cargoes Ease

11 Growth Drivers Gujarat acts as a gateway to West and to major states across India Strategic Location India s longest coastline of 1,600 km Highest number of commercial cargo ports Nearest maritime outlet to Middle East, Africa and Europe Nearest gateway to landlocked Indian states - vast and fertile hinterland comprising of West, North & Central India constituting 40% of the total Indian trade Gulf of Khambhat and Gulf of Kutch provide natural navigational safety Handled ~ 40% of national maritime trade in FY15 Multiple Choice Multiple choice of ports along with wide range of cargoes Ease of Port Privatisation Port Progressive and liberal policies which provide tariff freedom, long-term commercial arrangements, attractive concessions on port charges, bankable project documents and quality service priced at market rate Page 11

12 Gujarat - Competitive Advantage Gujarat has 45 ports and both Gujarat and Maharashtra constitute 47% of the total national port numbers. The total traffic volumes of non-major ports continued their upward trajectory with 45% share in traffic handled at Indian ports in Traffic at GMB ports have increased at CAGR of 13% from , while for Major ports, the traffic has increased at a CAGR of only 4.9%. Contrary to the sluggish pace of economic development during in India and around the world, GMB has achieved a fair increase of 8.5% in the traffic, while the traffic at Major Ports has grown by 4.7 % during the year Share of GMB in Total Maritime traffic in India 68% 32% Traffic at GMB Ports National maritime traffic excluding GMB Source: EY Analysis Gujarat ports account for 40.7% of traffic in the total national port traffic more than any other State. Out of this, the Non- Major ports of Gujarat constitutes 32% share. With MMT, Gujarat accounts for 71.4 % of traffic for non-major ports of India in India s most advanced VTMS unveiled in the Gulf of Khambhat The traffic at private ports under GMB has grown at an impressive CAGR of 24% during past five years Share of GMB in Total Traffic at Non-Major Ports The major share in Indian bunker market is taken up by Mundra port located in Gujarat. Bunkering is available majorly at Mundra and Kandla and to some extent at Bedi, Jamnagar, Rozi, Sikka, Vadinar & Navlakhi. 26% 74% Traffic at GMB Ports Traffic at Non- Major Ports Source: EY Analysis Page 12 Source: Gujarat Maritime Board

Port Policy December Ports & Fisheries Department Government of Gujarat India

Port Policy December Ports & Fisheries Department Government of Gujarat India Port Policy December 1995 Ports & Fisheries Department Government of Gujarat India INTRODUCTION Gujarat, situated on the western coast of India, is a principal Maritime State endowed with favourable strategic