Counting on India’s Corridors

By Thomas Timlen

In the government’s own words, the “National Industrial Corridor Development Programme (NICP) is India’s most ambitious infrastructure program aiming to develop new industrial cities as ‘Smart Cities’ and converging next-generation technologies across infrastructure sectors.”

Officials have said that the project will provide integrated connectivity for the movement of people, goods and services from one mode of transport to another. It also aims to create “last-mile” infrastructure and reduce travel time for people and goods.

Putting its money where its mouth is, the Indian government has dedicated US$1.4 trillion towards the completion of 11 industrial corridors with 32 projects to be developed in four phases through 2025, promising project cargo moves for domestic and international movers and handlers for at least the next three years.
However, where the funding will come from is not yet clear, as Prime Minister Narendra Modi has not specified how the government plans to raise the funds needed for the project.

Despite that lack of specificity, historically India has been successful in obtaining assistance with the funding of infrastructure projects, as illustrated by Japan’s agreement to provide funds for the Mumbai-Ahmedabad High Speed Rail project. In March 2022 Modi announced that Japan had agreed to increase funding for the project by Yen5 trillion over the next five years.

Phase one of the NICP is already well underway while the subsequent phases are taking shape. On the
sidelines, stakeholders in the project cargo transport sector have good reason for optimism.


Multimodal Development Plan

India’s plans are aimed at regions in all corners of the country, which also call for projects with roads, railways and airports to keep them all connected.

Logistics companies already engaged with project cargo transport in India could very well be moving cargoes related to projects that are part of the NICP without knowing it, as the tenders would focus on the items to be moved, with no need to indicate any relation to the related NICP project.

India’s energy sector has proven to be a consistent driver of demand for project cargo transport as well as heavy-lift operations. Mining activity, support of wind farm operations and the petroleum sectors have all drawn upon the services of project cargo carriers and heavy-lift providers, including heavy-lift air transport.

Today’s attention is on India’s ambitions to comprehensively improve and expand its national infrastructure, initiatives that go far beyond the sole support of the energy sector to cover all aspects of commercial activity. While the energy sector remains a key factor, new initiatives are aimed at an ambitious infrastructure expansion and enhancement that will also involve highways, railways, airports and so-called “industrial corridors” within which electronics manufacturing, pharma facilities, mega food parks and agro-processing centers, electronics manufacturing clusters, textile clusters and corridors of clusters to accommodate defence goods and services.

The maritime sector will also see cargo throughput volumes boosted as capacities at seaports and inland waterways are expanded. The expansion of ports and inland waterways also has the potential to boost project cargo transport as well as heavy-lift operations, as the construction itself will lead to demand for new port equipment including ever-larger, gantry cranes.


Connectivity Improvements Planned

In October 2021, Modi announced the launch of the National Master Plan for Multimodal Connectivity. Modi also explained that the related “Gati Shakti,” a new digital platform, will bring 16 ministries including railways and roadways together for integrated planning and coordinated implementation of infrastructure connectivity projects.

The number of projects involved make it easy to understand why a digital platform is needed to shore up planning and coordination. The digital platform is also open to industry stakeholders, further easing compliance with regulatory requirements and securing tenders.

The Gati Shakti platform has been designed to address past inefficiencies through institutionalizing holistic planning for stakeholders for major infrastructure projects.

Instead of departments planning and designing separately in silos, the projects will be designed and executed with a common vision. This will incorporate the infrastructure schemes of various ministries and state governments like Bharatmala, Sagarmala, inland waterways, logistics centers and seaports.

Economic Zones like textile clusters, pharmaceutical clusters, defense corridors, electronic parks, industrial corridors, fishing clusters, and agricultural zones will be covered to improve connectivity and make Indian businesses more competitive. It will also leverage technology extensively including spatial planning tools with Indian Space Research Organization imagery developed by the Bhaskaracharya National Institute for Space Applications and Geoinformatics.

The infrastructure initiatives have also been wrapped up under the NICP. The NICP identifies the specifics regarding the development of 11 industrial corridors that together involve 32 projects.


Financing Needed

While planning ambitious projects is one thing, seeing them come to fruition is another. Absent of adequate financing the prospects for completion would not be promising. India has so far committed US$1.4 trillion to the work found within the NICP program.

There is also a degree of support from Chinese industry. A spokesperson for Sany, a Chinese manufacturer of construction equipment including excavators that already commands a significant share of the Indian market, sees the infrastructure initiatives as potential drivers for additional equipment demand. The increased volume of equipment such as excavators will, in turn, boost demand for project cargo transportation services.

While Chinese equipment manufacturers welcome potential increases in sales volumes, the Chinese government has sought to provide financing for India’s infrastructure plans. Such offers have been on the table previously, however, political consequences loom. When loans have previously been secured for India from the Asian Infrastructure Investment Bank – where China is a key stakeholder – Modi has faced criticism as the timing coincided with the deaths of Indian soldiers at the border during clashes with Chinese troops. How heavily geopolitical blowback will weigh on future financing decisions remains to be seen.


Industrial Corridor Progress

The Delhi Mumbai Industrial Corridor (DMIC) is the first of the 11 industrial corridors being implemented wherein substantial progress has been made. Of the 10 projects within the DMIC, the four that are underway are:
• Dholera Industrial City, Gujarat (22.5 square kilometers).
• ShendraBidkin Industrial Area, Maharashtra (40 square kilometers).
• Integrated Industrial Township, Greater Noida, Uttar Pradesh (745 acres).
• The Integrated Industrial Township, VikramUdyogpuri, Ujjain, Madhya Pradesh (1100 acres).

The main difference between industrial corridors and special economic zones, or SEZs, is that while industrial corridors are for the purpose of industrial development and growth, SEZs are for the promotion of exports. Currently, there are more than 250 operational SEZs in India, whereas only 11 industrial corridors are envisaged.

Freight corridors will be created to link the industrial corridors. For railways, the target by 2024-25 is to handle cargo of 1.6 billion tons from 1.21 billion tons in 2020, decongesting 51 percent of the railway network by completing additional lines and implementation of two Dedicated Freight Corridors (DFCs). Also, detailed project reports are to be prepared for 4,000 kilometers of East-West, North-South and East coasts DFCs to be built in the public-private partnership mode.

In civil aviation, the target is to double the existing aviation footprint to a total of 220 airports, heliports and water aerodromes by 2025, which would require the construction of 109 additional facilities.


Access for All

Modi announced the plans on India’s 75th independence day, saying: “From free cooking gas to health insurance schemes, the poor of the nation know the strength of the government schemes. These schemes have expanded rapidly in recent times, but now we have to move toward saturation.

“One hundred percent of villages should have roads, 100 percent of households should have a bank account, while 100 percent of eligible persons should get insurance, pension and housing schemes. We have to operate on a cent-per-cent mode. All manufacturers should target the global market. India should become the hub of global market.”

Although the announcement was welcomed by many, some recalled how similar initiatives in the past had failed to meet their stated goals. Setbacks caused by Covid-19 that resulted with a recession last year have raised concerns, as do current geopolitical disruptions.

India’s plans also look towards energy security and tying this to the pursuit of renewable energy. The recent announcement by the power transmission and distribution business of Larsen & Toubro is one example. Larsen & Toubro’s renewables division has won an order to construct a 245-megawatt solar power project in Rajasthan in northern India. This project alone will generate business for the transport of components and supplies to the construction site as well as to the related infrastructure required to connect it with India’s electrical grid, as well as access roads and other requirements.

Ultimately the objective of the development of industrial corridors is to expand the industrial output, increase employment opportunities, provide better living and social facilities for the new and growing workforce by way of providing “plug and play” infrastructure at the plot level for industries.

While the various goals of this objective are being pursued, it is likely that the dozens of related projects will present continued demand for project cargo transportation by sea, road, rail, and perhaps even by air. 


Thomas Timlen is a Singapore-based analyst, researcher, writer and spokesperson with 31 years of experience addressing the regulatory and operational issues that impact all sectors of the maritime industry.

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