Lack of port-driven industrial ecosystem deprives Kerala from tapping Vizhinjam’s potential

The Vizhinjam International Seaport project in Kerala represents a cornerstone in India's ambitious maritime strategy, aiming to transform the nation into a global transshipment hub. The recent projection of Vizhinjam becoming the top-performing port on India's east and south coasts by December 2025, with an anticipated container throughput of 1.21 lakh Twenty-foot Equivalent Units (TEUs), underscores its immense potential. However, the accompanying concern that Kerala is unable to fully tap this potential due to a lack of a robust port-driven industrial ecosystem highlights a critical challenge in India's infrastructure development narrative.

**Background Context and the Vizhinjam Vision:**

India, with its vast coastline, has historically been a major maritime trading nation. In modern times, the need for deep-water ports capable of handling mega-container vessels has become paramount to reduce logistics costs and enhance trade competitiveness. Currently, a significant portion of India's transshipment cargo is routed through international hubs like Colombo, Singapore, and Dubai, incurring additional costs and transit times. The Vizhinjam port, located near Thiruvananthapuram, boasts a natural depth of 18-20 meters, making it ideal for accommodating the world's largest container ships without extensive dredging. This natural advantage makes it a prime candidate for a transshipment hub. The project, conceived decades ago, finally gained momentum through a Public-Private Partnership (PPP) model, with Adani Ports and SEZ Limited signing a concession agreement with the Kerala government in 2015 for its development and operation.

**The Core Challenge: A Missing Industrial Ecosystem:**

While the physical infrastructure of the port is progressing, the primary hurdle identified is the absence of a complementary industrial ecosystem. A successful port-led development strategy requires more than just deep berths and modern cranes; it necessitates integrated industrial zones, logistics parks, warehousing facilities, and robust hinterland connectivity (road and rail). These components attract manufacturing units, processing industries, and export-oriented businesses that can leverage the port for efficient import and export. Without such an ecosystem, the port risks becoming merely a transit point, failing to generate significant local value addition, employment, and overall economic multiplier effects for the state.

**Key Stakeholders Involved:**

Several entities play crucial roles. The **Central Government**, through the Ministry of Ports, Shipping and Waterways, provides policy direction and funding support, notably via the Sagarmala Programme. The **Kerala State Government** is responsible for land acquisition, developing the necessary hinterland infrastructure (roads, rail, power), formulating industrial policies to attract investment, and ensuring a conducive business environment. **Adani Vizhinjam Port Private Limited (AVPPL)**, the private concessionaire, is responsible for the construction and operation of the port infrastructure. **Local communities** are stakeholders due to potential displacement, environmental impact, and the promise of employment. Finally, **logistics companies, shipping lines, and various industries** are potential users and beneficiaries whose investment decisions are critical for the port's success.

**Significance for India:**

Vizhinjam's success holds immense significance for India. Economically, it can drastically reduce transshipment costs, saving foreign exchange and making Indian exports more competitive. It aligns with the 'Make in India' initiative by fostering manufacturing and processing industries. Strategically, a strong port network enhances India's maritime security and influence in the Indian Ocean Region. For Kerala, it promises industrialization, job creation, and diversification of its economy beyond traditional sectors like tourism and remittances. The port can serve as a gateway for southern India's trade, reducing congestion at other major ports.

**Constitutional and Policy Framework:**

Ports fall under the **Seventh Schedule of the Indian Constitution**. 'Major ports' are listed under the **Union List (Entry 27)**, meaning the Central Government has legislative authority over them. 'Ports other than those declared by Parliament to be major ports' are under the **State List**. Shipping and navigation on inland waterways are on the Concurrent List. Vizhinjam, being a major port project, is governed by central legislation like the **Major Port Authorities Act, 2021**, which aims to provide greater autonomy and flexibility to major ports. The broader vision for port-led development is encapsulated in the **Sagarmala Programme (launched in 2015)**, a flagship initiative focused on port modernization, new port development, port connectivity, port-linked industrialization, and coastal community development. The **National Logistics Policy, 2022**, further emphasizes integrated logistics infrastructure to reduce costs and improve efficiency, directly supporting the need for a robust industrial ecosystem around ports.

**Future Implications:**

The future success of Vizhinjam hinges on the proactive development of the surrounding industrial and logistical ecosystem. If Kerala successfully attracts industries, establishes Special Economic Zones (SEZs) or Coastal Economic Zones (CEZs) linked to the port, and improves road and rail connectivity to its hinterland and beyond, Vizhinjam could indeed become a game-changer. It would cement India's position as a major maritime power and a preferred global trade partner. Conversely, a continued disconnect between port development and industrial policy could lead to underutilization of a world-class asset, diminishing its economic returns and leaving India reliant on foreign transshipment hubs. This situation calls for concerted efforts from both the state and central governments, working in tandem with the private sector, to ensure policy coherence and timely execution of complementary infrastructure and industrial promotion initiatives.