With environmental clearance of Great Nicobar Port along with successful expression of interest (EOI) of prospective developers, India is looking to develop the port as a geostrategic palisade to neutralise the rising aspirations of China in the Indian Ocean.

Accordingly, the port is envisaged as a transshipment hub as it is in a strategic maritime location, with proximity to international shipping routes, potential for enhanced naval presence, and scope for strengthening economic ties with South-East Asian nations. The Great Nicobar Port also offers vast opportunities to tap the blue economy and natural resources exploration, improve energy security through alternative routes, and facilitate regional connectivity for trade, maritime cooperation and security.

In this framework, we should not forget that geostrategic capabilities and competence emanate from having a sustainable economic and business model for this proposed port, which is located in an eco-sensitive zone. Let us attempt to understand what can be a suitable business development model for this port.

Business model

Considering the high level of investments spanning over three decades (2028-2058), coupled with strong competition from well-established transshipment ports (Singapore, Klang and Colombo) that have, among others, world-class infrastructure and advanced technological integration, Great Nicobar Port has to plan a different revenue model.

Hence, the key to sustaining revenue lies in offering associated services, mirroring the approach initially taken by the Jebel Ali Port Authority. These include services beyond the routine port operations such as transshipment and hub services, offshore support services, vessel berthing and anchorage charge for a longer period, repair and maintenance, security and surveillance services.

Accordingly, Great Nicobar Port should position itself as a free trade zone that modern infrastructure that offers services at competitive rates so that sustainable business volume can be achieved at the earliest. This will essentially entail efficient air connectivity, and cargo inspection services with tax-neutralised business operations from both direct and indirect taxes — that is, exemption of taxes on both goods traded and business, like how established transshipment hubs such as Singapore and Dubai operated initially.

Such an approach is desired in the context of the low transshipment volume originating from India in the initial years, as India’s trade engagement remains sub-optimal and most transshipped cargo is focussed on Colombo port. The scope of enhanced transshipment business shifting to Great Nicobar, in absence of lucrative and competitive business offers, remains a distant dream.

In the context of huge challenges emanating from established ports, the Great Nicobar Port should explore a green business model based on environment-friendly and sustainable business operations. Accordingly, the business should primarily include associated logistics services such as providing bunkering services for vessels, supplying fuel and other provisions, establishing a ship-chandlery to supply vessels with essential provisions and equipment, and offering crewing services to connect ship-owners with qualified seafarers for their vessels. The port can also have an advanced training academy offering short term advanced courses and certifications to seafarers and industry professionals.

The proposed port, with air-connectivity both domestically and internationally, can develop facilities for cruise ships, including terminals, entertainment areas, and services for passengers. It can plan to utilise its weakness to its advantage, using port space for eco-tourism and associated events, such as hosting maritime-themed events, conferences or exhibitions like in Valetta, Malta.

Further, it can offer ship chartering services for companies in need of vessel transportation. It can, suitably, be a container aggregation point both for laden and reverse logistics operations and simultaneously offering containers for lease to shipping companies. It can have a dedicated industrial complex for ship docking, ship repair and maintenance services to attract vessels in need of refurbishment as it lies at an important location in a packed East-West maritime route.

Central to the sustainable revenue stream remains the free or subsidised warehousing services which can create traffic, both to and fro, for cargo handling. Accordingly, the planners should think of developing the facilities for bulk cargo, such as raw materials or commodities, to diversify the cargo mix.

Embracing a sustainable economic model for the Great Nicobar Port involves prioritising responsible practices for both society and businesses. This strategy focuses on marine tourism, promoting eco-conscious aquaculture, and integrating renewable energy projects. The port aims to become a regional transport and logistics hub, employing smart technologies for efficiency. Beyond economic considerations, the sustainable bulwark concept encompasses community engagement, education, and the preservation of cultural and natural heritage.

The Great Nicobar Port seeks to fortify economic interests and stand as a model of responsible and inclusive development, showcasing that progress can occur without compromising the delicate balance of oceans and ecosystems.

The writer is a Professor at IIFT, New Delhi. Views are personal

Central to the sustainable revenue stream remains the free or subsidised warehousing services which can create traffic, both to and fro, for cargo handling.

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