ACCORDING to a report by Jefferies, India's port sector, especially the container volume, is likely to be significantly impacted by the US tariff and the potential global growth slowdown.
'Container volumes are at a higher risk of potential global growth slowdown', said the report.
Container has a higher correlation to global GDP growth, while volumes have a higher correlation to domestic GDP growth, reports Asian News International.
The report, however, also noted that in india the sector will see an investment of over US$30 billion by FY30 as compared to less than US$10 billion in the past decade.
It says that volume growth will be driven by capacity addition and terminal privatisation at major ports. The private sector port players' volume will grow by 10-16 per cent CAGR with an EBITDA of 13-21 per cent in FY25-FY30.
Total cargo handling by PPP operators is targeted to reach over 85 per cent by FY30 from the existing 51 per cent. Approximately 28 per cent of the berths across major ports are under the PPP/captive model and handle around 51 per cent of the total cargo.
The government has already identified a pipeline of 81 projects worth $5 billion for PPP under the national monetisation pipeline, and 19 projects worth $1.4 billion were awarded to date. The government is planning to shift to an 80 per cent landlord model by 2030 across its twelve major ports.
India's port volumes have come to historically low correlation to global GDP growth and are highly dependent on domestic economic growth during previous crisis.
India is a net importing country with $241 billion trade deficit in FY24.
The report also noted that any slowdown in global growth drives volume growth by substantially lowering container freight rates.
Global container freight rates declined 20-25 per cent (YoY) in Feb-Mar 2024. Any further easing with improved availability can make EXIM trade more competitive, adding to port and rail volumes.
SeaNews Turkey
'Container volumes are at a higher risk of potential global growth slowdown', said the report.
Container has a higher correlation to global GDP growth, while volumes have a higher correlation to domestic GDP growth, reports Asian News International.
The report, however, also noted that in india the sector will see an investment of over US$30 billion by FY30 as compared to less than US$10 billion in the past decade.
It says that volume growth will be driven by capacity addition and terminal privatisation at major ports. The private sector port players' volume will grow by 10-16 per cent CAGR with an EBITDA of 13-21 per cent in FY25-FY30.
Total cargo handling by PPP operators is targeted to reach over 85 per cent by FY30 from the existing 51 per cent. Approximately 28 per cent of the berths across major ports are under the PPP/captive model and handle around 51 per cent of the total cargo.
The government has already identified a pipeline of 81 projects worth $5 billion for PPP under the national monetisation pipeline, and 19 projects worth $1.4 billion were awarded to date. The government is planning to shift to an 80 per cent landlord model by 2030 across its twelve major ports.
India's port volumes have come to historically low correlation to global GDP growth and are highly dependent on domestic economic growth during previous crisis.
India is a net importing country with $241 billion trade deficit in FY24.
The report also noted that any slowdown in global growth drives volume growth by substantially lowering container freight rates.
Global container freight rates declined 20-25 per cent (YoY) in Feb-Mar 2024. Any further easing with improved availability can make EXIM trade more competitive, adding to port and rail volumes.
SeaNews Turkey
