India's Sagarmala(Ocean Necklace) Initiative -Will it connect Southern Asia?
Launched in 2015, the Sagarmala (Ocean Necklace)Project has been one of the most promising projects launched by Modi government. Seen as an aggressive strategy to finally use its long coastline, the Indian project in the maritime domain has been hailed as a promising initiative. But while its vision looks pristine on paper, this port led development project has been questioned by many scholars – will it actually connect the southern states, and if yes, when?
Spear headed by Vajpayee in 2003 and later shelved by UPA government, SAGAR (Security And Growth for All in the Region) Project plans to promote economic and diplomatic investments for the country via maritime trade by leveraging India’s 7,500 km long coastline. Undertaken by the Modi government, Sagarmala project is a national initiative which aims to change the logistics sector in India by using the Indian coastlines and waterways to its full potential. The Sagarmala Project as of today focuses on four main aspects – efficient evacuation to and from hinterland – by improving connectivity via rail road and freight carriers; supporting and enabling port led development; port infrastructure enhancement, including modernisation of the existing ports and setting up new ones; and lastly, development of coastal community.
One of the major initiatives of the Modi government has been to enhance the connectivity between India and the rest of the world. This can be reflected in the foreign policy initiatives taken by the government over the years. Most of the foreign policy projects and even domestic projects focus on development of infrastructure which would enhance connectivity, both inter and intra region. While road and rail have been given a priority, the Sagarmala project prioritises the maritime route and infrastructure development. Under this initiative, the government has sworn to complete 150 projects which requires an investment of around 4 lakh crores. During the inception of the project, the Sagarmala Development Company was set up to provide support to various stakeholders for setting up the projects.
The Sagarmala Initiative, if implemented correctly, can provide various benefits to India. Given the large coastline of India, it has always been one of the ways of transit of goods, services and even people. But over the years, while the coastline has remained the same, so has its infrastructure and facilities. Boosting the infra and thereby its services will not only bring in more revenue by saving costs, but it will also smoothen the trade processes. This will help India in finally using the coastline up to its full potential and give India a push in the global ranking of trade which it desperately wants. Development of inland waterways is not a new thing for Indians, given that it was an ancient technique. Transport costs are very high in India at around 18% in comparison to less than 10% of China. Inland waterways can reduce this transportation costs which can lead to greater profits. Lastly, infrastructure is vital if a nation wants to achieve benefits from trade and. The infrastructure prior to the initiative was poor and the linkages between the ports and related facilities were in dire need of attention. Therefore, coastal shipping would not only save cost but would also renew existing and new sea routes. The government has recently relaxed the transport rules for shipping, which will allow foreign ships to use coastal routes. The project is deemed to be completed in 2025 and is expected to produce 40 lakh jobs, both directly and indirectly. It is estimated that if completed, the logistics cost saving per annum would be around INR 35,000-40,000 crore and would boost export by USD 110 billion.
The government has planned six megaports under the project, namely the Vizhinjam International Seaport (Kerala state), Colachel Seaport (Tamil Nadu), Vadhavan Port (Maharashtra), Tadadi Port (Karnataka), Machilipatnam Port (Andhra Pradesh), and Sagar Island Port (West Bengal). The Minister further informed the house that 6 new port locations, namely – Vadhavan (Maharashtra), Enayam (Tamil Nadu), Tajpur (West Bengal), Paradip Outer Harbour (Odisha), Sirkazhi (Tamil Nadu), Belekeri (Karnataka) have been identified and no new port has been included in the Sagarmala projects in Kerala. The government has been very much in favour of developing new CEZ’s (Coastal Economic Zones) which would lead to the prosperity of the coastal regions and bring in economic diversification and its revenue.
However, as of now, only one-fifth of the said project has been completed. The development of Sagarmala projects is slower than what both, the government and the policymakers envisaged. This is because of multiple reasons spanning across various domains. Firstly, there has been a major lacuna of fund mobilisation and investment. The initiative has been budgetary constraints which have slowed down the investments. The initiative is being funded by the government from various sources like ministries, agencies as well as private investors. While the government has come up with plans to support investors with subsidies and tax holidays, shipping companies, which comprise a majority of the stakeholders have been facing issues in their home territory. The shipping companies have been struggling from nearly a decade as crude oil prices have increased which have increased bunkering prices while the debt coverage and return indicators have slowed down. The pandemic has worsened the situation and the investments would take a bigger hit. Second, the costs of development of the projects have been more than the government accounted the projects to be. This is because more initiatives were added to the already ambitious projects. The government, while developing the ports, has also added new projects like island development. The Ministry of Statistics and Programme Implementation monitors infrastructure projects and has identified that out of both the small and big projects under the initiative, 462 reported cost overruns and 557 were delayed. The average time overrun in these 557 delayed projects is 44.69 months.
Third, the central government has not had a good track record when it comes to completing the ambitious projects it undertakes. While this has resulted in many deadlines not being met for the completion of project as stated above, there are opinions that the government may have become too ambitious. One cannot deny that India wants to create big CEZ’s like China, as it is an important factor which might help India in countering the Belt and Road Initiative. Even so, unlike China, where the state retains both economic and political power, India does not have this liberty. Also, the lack of budget for such projects with the central government just adds on to the impediment. Fourth, the projects continue to face issues due to land acquisition problems. Adding on, many activists have raised issues about the negative impact which the projects might have on the environment.
Even though this may be a national project, India has big dreams and goals when it comes to regional politics. With many of its neighbours in its close coastal peripheries, it is natural that the project aims to connect India with the neighbours, but if it wishes to do so smoothly, it needs to tackle the above listed challenges. Anything worse than half baked promises, is a half-completed or shoddily completed connectivity project. While there is no doubt that Sagarmala can accelerate the cooperation between the neighbouring countries, something which New Delhi has been wanting, there is an increased need to involve the neighbours in the project.
Firstly, while the State Sagarmala Committee has been set up, which gives the state government a say in the project, state governments should be allowed to take lead in development of the project. Secondly, para-diplomacy between the states need to be encouraged more. The state committees can have neighbouring states as observers for their meetings and summits. This would not only increase trust between India and its neighbours, but also prove as a platform for negotiations, deliberation and cooperation. Also, existing structures of governance for development projects are not up to the mark. While the neighbouring countries may not be able to contribute economically, India should seek assistance in terms of expertise and raw materials for the neighbours. It is also pertinent to involve the local community members in this project because at the end they will benefit from it. Coastal border communities of both India and neighbouring countries should be involved in the project making to make it more sustainable.
The government currently has sufficient motivation and necessary clout to introduce the reforms and policies needed to successfully deliver Sagarmala and its objectives. It just needs to be cognizant of where it is falling short and acknowledge it in order to move on. Regional power structures in South Asia are built on shaky foundations but the similar pasts and similar goals to pave way for cooperation, which at times requires compromise and need to ask for help. The sooner the Modi government realises that it, the better will this national initiative be able to connect Southern Asia.
Pic Courtesy- Press Information Bureau ,India
(The views expressed are those of the author and do not represent views of CESCUBE.)
