The commissioning of the Vizhinjam International Transhipment Deepwater Multipurpose Seaport represents a significant development in India’s maritime industry. Managed by Adani Ports and Special Economic Zone Ltd (APSEZ) in collaboration with the Kerala government, this port is vital for India, which currently relies on foreign ports for about 75% of its transshipment cargo, resulting in an estimated annual revenue loss of $200 million to $220 million.
Vizhinjam is strategically located on key international shipping routes connecting Europe, West Asia, and the Far East, with a natural draft of approximately 20 meters that minimizes the need for extensive dredging. This positioning enables it to serve ultra-large container vessels without requiring them to alter their routes, thereby reducing operational costs.
Historically, India’s container throughput capacity lags behind that of China, which handled 330 million TEUs compared to India’s 20 million TEUs last year. This stark contrast underscores the necessity for modern ports like Vizhinjam to boost India’s maritime capabilities.
Despite the project’s potential, it has not been without challenges. Since the agreement in 2015, the Kerala government faced significant opposition from local fisherfolk, environmental concerns, and disruptions caused by natural disasters and the COVID-19 pandemic. However, commercial operations began in July 2024, with 265 ships, including large mother vessels, successfully berthing.
The first phase of the project saw an investment of ₹5,595 crore from the Kerala government, ₹2,454 crore from Adani Ports, and a viability gap fund loan of ₹818 crore from the Union government, stirring political discussions over the funding structure. To truly realize Vizhinjam’s potential as a maritime hub in South Asia, it is crucial for both the central and state governments to ensure timely development of the necessary rail and road connectivity. This infrastructure is vital for efficient cargo movement to and from South India’s hinterland.
Plans for subsequent development phases involve an additional investment of around ₹9,500 crore by 2028, as stipulated in the agreement between APSEZ and the Kerala government. These phases will focus on creating essential warehousing, logistics, and industrial facilities. This multifaceted approach aims to transform Vizhinjam into a thriving commercial hub, unlocking significant economic advantages for India and reinforcing its position in global maritime trade.
In summary, Vizhinjam has the potential to reshape India’s trade dynamics by reducing reliance on foreign ports and optimizing domestic shipping costs. Its successful execution and the development of surrounding infrastructure will be crucial in establishing it as a key player in South Asia’s maritime sector.
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