FDI Inflows to Ports

Abstract:

100 % FDI is allowed in Indian ports through the automatic route. Major initiatives have been taken to boost the FDI inflows to ports in India. Dubai Ports World of the United Arab Emirates (UAE), is one of the major foreign investors in the Indian Ports.

With the opening up of the Indian economy during the early 1990s, the business activities in India have increased in many folds. Furthermore, with the growth of the Indian manufacturing industry there has been an increased export activity. As a result of which, the Indian transport and logistics industry have witnessed tremendous growth. The services of the Indian ports, is one of the main exporting means of the Indian manufactures.

Further, it is also one of the main importing means for the Indian business fraternity. The government of India has allowed foreign direct investment for the development of Indian ports. This inflow of FDI in the Indian ports would facilitate smooth functioning of export and import activities.

FDI in the Indian ports and some of the latest developments associated with it are as follows:

The Indian Ports have witnessed increased activities in the container cargo. The activities of the Indian ports are controlled by the Indian Ministry of Surface Transport. The foreign direct investment allowed in the Indian Ports is 100% and through automatic route. The quantum of foreign direct investment in the Indian Ports during the period from August 1991 to March 2004 was Rs 5205 million. Further, the percentage of the total foreign direct investment made in Indian ports during the same period was 0.29 of the total FDI inflow. The total number of approvals for foreign direct investment in Indian ports during the period from August 1991 to March 2004 was seven. Further, all the foreign direct investment made during the aforesaid period were FDIs concerning technical domain. The foreign direct investment that is expected to inflow into the Indian ports is around US $ 1.9 billion and this investment will mainly be used for increment of Indian port capacity. Moreover, prospects for FDI are high in the cargo handling capacity of Indian ports. Dubai Ports World, United Arab Emirates (UAE), is one of the major foreign investors in the Indian Ports. Dubai Ports World is expected to establish container ports operation in a number of Indian ports. The foreign direct investment by Dubai Ports World will enable it to have access to more than 50% of Indian container shipping traffic.

Last Updated on 4/23/2011