Maritime commerce serves as the backbone of the global economy, considering that about 80% of the total global trade is transported through maritime routes. Indian Ocean is an immense maritime space connecting Africa, Asia and the Middle East and is a crucial avenue for the passage of global trade through Sea Lanes of Communication (SLOC). Littoral nations bordering the Indian Ocean have unique potential to capitalize on their coveted positions to build maritime sectors that will drive economic growth. India has been successful in capitalizing on its geographical advantage and has developed a strong maritime sector which substantially contributes to its economic growth. However, while being fortunate to have a wealth of maritime potential, Pakistan falls short in this potentially lucrative field. An in-depth analysis of the Indian shipping industry provides important information about what Pakistan can and should do to improve its marine industry, particularly its shipping industry.
There is no gainsaying that India has become a leading maritime country with an expansive shipping sector with fully developed ports allowing for unhindered maritime trade activity. India had 1526 vessels with 13.75 million gross tonnages as of December 2023[1].
Coastal trade vessels constitute a large portion of the Indian shipping industry and account for about 68% of its total merchant fleet including 32% of ships dedicated to international trade. Regarding carrying capacity, however, overseas trade vessels account for 88% of the actual tonnage. A strong network of 13 major ports as well as 200 non-major ports[2], including Vishakhapatnam Port, Jawaharlal Nehru Port, Mundra Port and many others, which support India’s expansive maritime trade activities.
The Shipping Corporation of India or SCI is a strong pillar of India’s maritime economy. SCI operates 64 ships with 2.99 million gross tonnages.[3] These vessels include bulk carriers, container ships, oil tankers, LPG carriers as well as offshore supply ships, ensuring smooth transportation of commodities to the markets across the globe. The major emphasis of SCI focuses on international trade as 55 out of 64 vessels cater to overseas shipping which reduces the country’s dependence on foreign shipping companies.
The shipping industry in India contributes significantly to the country’s economic growth by functioning in the maritime, commercial, and trade sectors on a global scale. In 2023, India’s maritime imports, consisting of crude oil, petroleum and industrial machinery, were recorded at 675.44 billion dollars[4] and its exports comprising primarily textiles, agricultural goods and automobiles, were valued at 778.2 billion dollars.[5] This reinforces the importance of marine shipping to the Indian economy. Sufficient investment in port infrastructure, digitalization, and hinterland connections has culminated in improved efficiency, fewer interruptions, and easier port operations.
The Indian government’s Sagarmala initiative seeks to upgrade ports, enhance logistics, and increase hinterland connectivity. Under this initiative, India is expanding and improving its infrastructure and integrating automation. The development of LNG-powered ships and the use of renewable energy at ports support green shipping technologies and lead to sustainable maritime trade.[6] Moreover, to increase its international shipping revenue and attract foreign investment in its port sector, India also launched the Maritime India Vision 2030 in 2021.[7]
In contrast to India’s success in the marine industry, Pakistan’s maritime sector suffers from abysmal neglect. Despite possessing a vast coastline of more than 1001 km, Pakistan has struggled to establish itself as a maritime country. The country’s three major ports (Karachi Port, Port Qasim, and Gwadar Port) are the backbone of the country’s maritime commerce; however, these ports have been underutilized due to poor infrastructure, operational incapacity and a lack of shipping facilities. Karachi Port handles about 60% of the country’s maritime trade but suffers from operational bottlenecks, outdated port facilities and inefficient cargo handling. Although modernized, Port Qasim has limited handling capacity, and Gwadar Port, with the potential to become a hub of maritime trade under CPEC, has faced inexplicable delays in reaching full functionality.
A very concerning challenge to the country’s maritime sector is the lack of a strong national fleet, as the Pakistan National Shipping Corporation (PNSC) owns a fleet of only 12 ships. These vessels, with a carrying capacity of 938, 876 DWT, are insufficient to cater to Pakistan’s shipping needs. Resultantly, the country heavily depends on foreign shipping companies and pays an exorbitant 5 billion dollars as freight charges to other countries.[8] This is not only an overwhelmingly huge price to pay, but also leads to increased shipping costs, vulnerability to external disruptions, and weakened control over the country’s supply chains.
To rescue itself from this malaise and develop a robust national maritime sector, Pakistan needs to take decisive measures to upgrade its shipping sector. Expanding the PNSC fleet is an imperative, as with each passing day incurring millions in freight charges. The acquisition of more container ships, bulk carriers and oil tankers can be the first initiative to reduce the country’s dependency on foreign ships. Inviting the private sector to invest in shipbuilding and logistics can increase the country’s shipping capacity. Partnerships with international shipping companies and incentivizing local investment through tax cuts and ease of business can also attract investment in this rewarding sector.
Another crucial area for Pakistan is the development of critical port infrastructure. Modernization initiatives at Karachi and Bin Qasim ports, improving cargo handling capacity, and equipment and digitalization initiatives can enhance efficiency, leading to greater maritime economic turnover for the country. Getting Gwadar Port fully functional is also critical for the country to unlock transit trade opportunities from Central Asian countries, increasing regional connectivity. Thirdly, there is a lack of trained manpower for the shipping industry. Promoting maritime related education can ensure the availability of skilled professionals for the shipping industry.
At the heart of the country’s lagging maritime sector is deplorable neglect. Pakistan’s strategic gaze has remained landlocked, ignoring the vast maritime potential it has, for earning economic dividends. A strong political resolve is needed to formulate maritime policies to facilitate industrial growth. Investor friendly policies, tax incentives for investment in the shipping sector and long-term planning can result in a desirable environment for businesses in this field to thrive and grow steadily. So far, Pakistan’s revised maritime strategy has been awaiting approval for more than a decade now with successive governments failing to develop a policy resolve for investment and growth in this rewarding area. It doesn’t behoove the governments to borrow loans every year while the shipping sector keeps paying billions as freight charges to other countries.
India’s success in the shipping sector highlights the impact of strategic investments, policy support, and infrastructural development. By implementing similar measures, Pakistan can transform its shipping industry into a vital economic driver. A self-sufficient maritime sector would reduce trade deficits, enhance economic stability, and position Pakistan as a key player in regional and international trade. Similarly, Pakistan’s maritime sector has the potential to become a significant economic engine. As global maritime commerce continues to thrive and neighboring India plans to expand its fleet by adding another 1000 ships by the next decade,[9] it is time for Pakistan to think and act wisely to tap into its maritime potential and emerge as a maritime nation.
[1] https://shipmin.gov.in/sites/default/files/ISS%202023.pdf
[2] https://byjus.com/free-ias-prep/major-ports-in-india/
[3] https://shipmin.gov.in/sites/default/files/ISS%202023.pdf
[4] https://www.india-briefing.com/news/indias-trade-performance-fy-2023-24-exploring-new-export-markets-32612.html/
[5] https://economictimes.indiatimes.com/news/economy/foreign-trade/indian-exports-up-in-115-nations-out-of-238-destinations-in-2023-24/articleshow/109978944.cms?from=mdr
[6] https://shipmin.gov.in/sites/default/files/ISS%202023.pdf
[7] https://www.iims.org.uk/maritime-india-vision-2030-key-priorities/
[8] https://moma.gov.pk/ProjectDetail/ODFiODYxMTItMWIyMS00ZDBhLTkyYzYtZjAyOWMyODIyOWE1#
[9] https://www.business-standard.com/industry/news/india-plans-new-shipping-firm-to-expand-fleet-by-1-000-ships-in-next-decade-124060500536_1.html
Dr Maira Afzazze Saeed is Assistant Professor at Pakistan Navy War College.
