Eu india industry study

EU-INDIA Trade: An analysis of the Paper industry
and Indian coastal shipping
Thesis submitted as a partial fulfillment to obtain the degree of
M.Sc. in Transport and Maritime Management
Academic year 2014-2015
Promoter: Prof. Dr. Evrard Claessens
Supervisor: Mr. Nico Berx, Director of PAI
Mohamed Asik Rahman RAJAMOHAMED

DECLARATION ON PLAGIARISM – Academic year 2014-2015
I hereby confirm that I have read and understood the regulations and guidance on plagiarism,
as reproduced by ITMMA – University of Antwerp, and as assented to previously by myself.
I further confirm that the work submitted herewith is wholly my own, except where other
cited and acknowledged.
STUDENT NUMBER: 20142954
NAME: MOHAMED ASIK RAHMAN RAJAMOHAMED
SIGNATURE:
DATE: 18/08/2015
ii

Acknowledgement
With my great gratitude, I would like to acknowledge all those who have given kind
assistance and support for the completion of my thesis:
To my promoter professor Evrard Claessens, a prodigy for the precious suggestions and
assistance in guiding me to finish my thesis.
To my Co-promoter Mr. Nico Berx, Director of the Port of Antwerp International for his
invaluable expertise to complete the thesis successfully.
To all ITMMA professors and staffs, who inspired me by great lectures and gave me
kind assistance during the academy year 2014-2015.
Finally, I would like to send my deepest appreciation to my family and dear friends for
the great support and encouragement which helped me overcome all difficulties and
complete the Thesis.
iii

Abstract
EU, is the largest trading partner for India. This paper aims to identify India’s emergence on
paper industry with a focus on its foreign trade with EU and emergence of coastal shipping in
India based on reviewing and harmonizing literatures, EUROSTAT, and Indian DGSCIS
statistics. The first part aims to clarify and analyze the trade trend between the EU28 and India
by looking at their foreign trade situation and intra-trade between each other. The next step is to
analyze its growth in different dimensions over the years 2008 and 2012 using market share,
SWOT and snapshot analysis with an emphasis on paper industry (HS 49). These years carry its
significance as the economic crisis shook the lives which still has its bright stains. Secondly, the
concentration is on the coastal trade of the Indian ports where the case study on Gujarat and
Orissa ports are worked out. After looking at this picture, we conclude the paper with few
recommendations and findings which could support feasibility study for Port optimization at
these ports and may act as a key to enlighten investment opportunities for the concerned
stakeholders in the supply chain perspective.
Key words: India, EU, Trade, Indian coastal shipping, Snapshot, SWOT
iv

Table of Contents
Cover page i
Declaration on Plagiarism ii
Acknowledgement iii
Abstract iv
Table of Contents v
List of Tables and Figures vi
1. Introduction: 1
1.1. Economic Position: 2
1.2. Sectors and its demographics: 4
1.2.1. Agriculture: 5
1.2.2. Industry: 5
1.2.3. Services and Infrastructure: 7
1.3. Foreign Trade situation: 7
2. Growth analysis EU vs India: 13
2.1. EU-India iMports composition growth analysis: 16
2.2. EU-India eXports Composition growth analysis: 19
2.3. Market share, SWOT and Snapshot analysis for Printed Books: 21
3. Indian ports and its Inland traffic–Trends and Prospects: 26
3.1. Overview of Modal networks: 26
3.2. Challenges and Synchronized measures: 27
3.3. Dissection of Ports performance in foreign trade: 29
3.4. Coastal Shipping trade 2008-13 based on DGCIS trade data: 34
3.4.1. Executive summary: 34
3.4.2. Comparison of DGCIS and IPA statistics: 37
3.4.3. DGCIS data-driven analysis 2012-14: 40
3.4.4. Case Study: 46
3.4.5. Findings and Recommendations: 53
4. Conclusion: 55
5. References: 56
6. Appendices 61
v

LIST OF FIGURES
FIGURE 1. EVERY COUNTRY’S HIGHEST VALUED PRODUCT ................................................................................................ 1
FIGURE 2. ANCIENT INDIA TRADING MAP AND THE COLONIZATION OF BRITISH............................................................... 2
FIGURE 3. GDP PROJECTIONS FOR EMERGING ECONOMIES ............................................................................................... 3
FIGURE 4. STATES GDP SHARE IN THE COUNTRY'S WEALTH 2010-11................................................................................ 3
FIGURE 5. EMPLOYMENT NUMBERS BY SECTORS IN INDIA 2010 ......................................................................................... 4
FIGURE 6. SECTOR SHARES TO INDIA’S GDP 2010............................................................................................................... 4
FIGURE 7. MAJOR CULTIVATION AREAS BY STATES AND CROPS ......................................................................................... 5
FIGURE 8. MANUFACTURING IS THE ACHILLES WHEEL OF INDIAN ECONOMY.................................................................. 6
FIGURE 9. SERVICES GROWTH RATE OF DIFFERENT COUNTRIES IN 2013-14...................................................................... 7
FIGURE 10 MERCHANDISE TRADE BALANCE DATA .............................................................................................................. 7
FIGURE 11. INDIA'S LIST OF EXIM AND TOP TRADING PARTNERS ..................................................................................... 9
FIGURE 12. INDIA’S EXPORTS CONTRIBUTION TO DIFFERENT COUNTRIES AND % SHARES 2011-14 ............................. 10
FIGURE 13. INDIA'S IMPORTS CONTRIBUTION FROM DIFFERENT COUNTRIES AND % SHARES 2011-14......................... 11
FIGURE 14. WTO TRADE PROFILES OF INDIA AND EU, SOURCE: WTO REPORT 2014 ................................................... 12
FIGURE 15. IMPORTS AND EXPORTS EU WITH INDIA IN BILLION EUROS, 2007-13........................................................... 13
FIGURE 16. TOP 5 HS SECTIONS IN BOTH X AND M TERMS FROM EU STAND VIEW WITH INDIA.................................... 14
FIGURE 17. PROPORTIONAL PRODUCT AND COUNTRY SHIFT BASED ON HS SECTIONS .................................................. 15
FIGURE 18. COMMODITY SHARES OF EU IMPORTS 2008 FROM INDIA ............................................................................... 16
FIGURE 19. COMMODITY SHARES OF EU IMPORTS 2012 FROM INDIA ............................................................................... 18
FIGURE 20. COMMODITY SHARES OF EU EXPORTS 2008 TO INDIA .................................................................................... 19
FIGURE 21. TURNING THE PAGE ON INDIA PAPER INDUSTRY, DELOITTE REPORT 2012.................................................. 21
FIGURE 22. STRATEGIC ROAD MAP FOR PAPER INDUSTRY GROWTH................................................................................ 22
FIGURE 23. PAPER INDUSTRIES DEMOGRAPHIC LOCATION IN INDIA ................................................................................ 22
FIGURE 24. SNAPSHOT OF EU IMPORTS HS 49.................................................................................................................... 23
FIGURE 25. SNAPSHOT OF EU EXPORTS HS 49.................................................................................................................... 23
FIGURE 26. SWOT ANALYSIS, MARKET SHARES AND SNAPSHOT ANALYSIS.................................................................... 24
FIGURE 27. STRING OF PEARLS - MARITIME SILK ROAD .................................................................................................. 27
FIGURE 28. SAGAR-MALA ROAD MAP AND 'MAKE IN INDIA' ............................................................................................ 28
FIGURE 29. GROWTH RATES FOR GDP AND CARGO TRAFFIC GROWTH.......................................................................... 29
FIGURE 30. INDIAN PORT TRAFFIC 1980-2014 .................................................................................................................... 30
FIGURE 31. MAJOR PORTS TRAFFIC FY13 AND STATE WISE CARGO TRAFFIC FY12...................................................... 31
FIGURE 32. SEAPORTS OF INDIA AND COMMODITY BREAKDOWN OF MAJOR PORTS ...................................................... 32
FIGURE 33. COASTAL SHIPPING GLOBAL PERCENTAGES ................................................................................................... 34

FIGURE 34. CARGO MOVEMENTS BY MODES AND INDIA'S MODAL SHARE 2014 .............................................................. 35
FIGURE 35. PRELIMINARY /INDICATIVE PROJECTIONS OF COASTAL CARGO FOR NEXT 20 YEARS ............................... 35
FIGURE 36. CARGO HANDLED AT MAJOR AND NON-MAJOR PORTS FOR 2009-13............................................................ 36
FIGURE 37. COASTAL CARGO COMPOSITION BREAKDOWN ............................................................................................... 37
FIGURE 38. COMPARISON OF INDIAN PORT STATISTICS TO DGCIS COASTAL TRAFFIC DATA 2012-14 ......................... 39
FIGURE 39. INWARD AND OUTWARD COASTAL TRAFFIC IN VALUES FOR 2012-13........................................................... 40
FIGURE 40. INWARD AND OUTWARD MOVEMENT IN VALUES 2013-14.............................................................................. 41
FIGURE 41. GUJARAT COASTAL MAP SHOWING THE PORTS ............................................................................................. 46
FIGURE 42. TONNAGE FLOW FOR GUJARAT 2012-13 AND 2013-14 ................................................................................... 47
FIGURE 43. ORISSA MAP SHOWING PARADIP PORT............................................................................................................ 49
FIGURE 44. TONNAGE FLOW FOR ORISSA 2012-13 AND 2013-14....................................................................................... 50
FIGURE 45. DEMOGRAPHICAL LOCATION OF STEEL AND OTHERS.................................................................................... 52
LIST OF TABLES
TABLE 1. INDIA’S EXIM TRADE FY WISE .................................................................................................................................8
TABLE 2. GRUBEL LLOYD INDEX ...........................................................................................................................................15
TABLE 3. COMPOSITION AND GATEWAY COUNTRIES OF EU IMPORTS FROM INDIA USING A TABLE .................................16
TABLE 4. TOP PRODUCTS IMPORTED FROM INDIA IN 2008 ..................................................................................................17
TABLE 5. TOP PRODUCTS IMPORTED FROM INDIA IN 2012 ..................................................................................................18
TABLE 6. COMPOSITION AND GATEWAY COUNTRIES OF EU EXPORTS TO INDIA USING A TABLE.......................................19
TABLE 7. TOP PRODUCTS EXPORTED TO INDIA FROM EU IN 2008 .....................................................................................20
TABLE 8. TOP PRODUCTS EXPORTED TO INDIA FROM EU IN 2012 .....................................................................................20
TABLE 9. STATE WISE MAJOR AND MINOR PORTS CARGO IN FY2014..................................................................................31
TABLE 10. MAJOR PORTS TRAFFIC 2013-14 .........................................................................................................................33
TABLE 11. COASTAL TRADE CONSIGNMENTS INWARDS AND OUTWARDS 2012-14..............................................................43
TABLE 12. COASTAL TRADE MATRIX IN VALUES FOR 2012-14.............................................................................................44
TABLE 13. COASTAL TRADE MATRIX IN TONNAGE FOR 2012-14.........................................................................................45
TABLE 14. BLOW UP OF COASTAL TRAFFIC FOR GUJARAT AND COMMODITY FLOW FOR THE YEARS 2012-14 ...............48
TABLE 15. BLOW UP OF COASTAL TRAFFIC FOR ORISSA AND COMMODITY FLOW FOR THE YEARS 2012-14...................51

1 | Industry Study – EU_India
1. Introduction:
Globalization has brought revolutionary changes in the economic situation of world and life
on earth stuffing growth and sometimes chaos. Nations with strong International trade not
only cherished growth in their citizen’s life, but also maintained status quo on their territories
and power over the world. Basically by keeping their opportunity costs low and gaining
global market share. Globalization is New Mantra for economic success in the world (Dr. B.
Revathy et al, 2012). A restricted market is no more an option. Japan who opened up its
borders after the Samurai times is a good example for its skyrocketed growth. Emerging
economies get so called “special and differentiated treatment” in treaties and agreements as
a means to reap the full benefits of International trade especially by taking longer time on
trade tariffs. “Trade is not an end in itself, but a means to economic growth and national
development. The primary purpose is not the mere earning of foreign exchange but the
stimulation of greater economic activity“ (Dr. Revathy et al, 2012).
Figure 1. Every country’s highest valued product, Simran Khosla - CIA Factbook
Ancient India had strong cross border trade relations with Europe, China and few other world
countries trading spices, rice, cotton, gold and metals. Globalization is hardly a new factor
to her accounting since Indus valley civilization till the colonial times in maritime trade. The
inception of British east India Company into Indian political theatre and its dominance over
other European powers disrupted the then Mughal’s uniformity. A huge capital flow from
India to England marked India’s economy one of the poorest at the end of Second World
War (figure 2). The Green revolution and Great depression of 1929 took place in India then
(Wikipedia, n.d.).
India has always been great trading partner with European Union, China and United states
among others. Yet, her contribution is only 1% on global scale. The growing problems on
macro-level are inflation and CAD because of the stalled WTO Trade facilitation agreements
and BTAI with EU which can significantly spur economic growth and win-win situation.

Figure 2. Ancient India trading map and the colonization of British
By brushing over the economic condition and big picture on her foreign trade with principal
regions in the 1st
chapter, EU is by and large her biggest trading companion. The steadily
growing economic development and long term strategies of the new Government has painted
India with determined mindset shift as bright spot among developing nations. Recognizing
these potentials, growth analysis between India and EU is performed in 2nd
chapter combined
with specific industry case study to depict the importance concluded with SWOT and
snapshot analysis. The final chapter deals extensively about the Indian ports performance
and analysis of the inland traffic through which the research aims to point out the potential
of Gujarat and Orissa ports. By then, recommendations for further development of coastal
shipping and respective traffic optimization based on intra-trade flows concludes the paper.
1.1. Economic Position:
India is often seen as a rising superpower by world and believed to play a major role in 21st
century. During the pre-liberalization period (1947-1990), the economic policies like import
substitution mechanisms, central planning and five year plans resembling Soviet Union but
rather in direct and indirect state intervention revived her dismal state, called “Hindu rate of
growth” by economists. The famous Economic liberalization took place in 1991 eroding
License Raj and tariff reduction, interest rates, FDI hikes in different sectors. By the turn of
21st
century, she witnessed free market economy with increased food security, subsidies and
financial liberalization. India enjoyed a high GDP rate 9% during 2003-2008 but after the
crisis, an anemic growth rate of 4.4% till 2013.
The modern day India took its cue from history of globalization, now in continuous structural
reforms to its domestic and foreign trade policies like “Look East” to “Link West” under the
aspirant leader Narendra Modi. With 1.2 billion people and the world’s largest young
workforce by 2028 that humanity ever seen, she is in massive rural-urban migration. Massive
investments will be required to meet soaring future aspirations (World-Bank, 2013). With
the revival of world GDP which is hanging at 3.3%, India’s GDP is expected to be around
7.5% in FY15 by IMF whereas World Bank estimates at 7.5% and 7.9% in 2016 outpacing
China (ET-Bureau, 2015). The same institutions have given their appreciation for 2015
budget and RBI inflation measures. India is ranked 134 of 189 countries in “Ease of doing
Business” but still ranks favorable in protecting consumer and investor rights, a peripheral

for sustainable growth. The trade Openness ratio1
of India has gone up from autarkic 13.32%
in 1990-91 to 31.63% in 2005-06, while China with a peculiar figure of around 60%. But the
real potential of India is by and large much more, so enormous changes are required to meet
growing urban migration, and employment opportunity needs by 2025. India even managed
to send a cost-effective orbit to Mars and offers the world art of yoga, Kamasutra,
Bollywood, Ayurveda, and Chicken-tikka-masala.
Figure 3. GDP projections for Emerging economies, Market Realist 2014
Figure 4. States GDP share in the country's wealth 2010-11, Source: www.mapsofindia.com
1
This ratio is sum of exports and imports as a ratio of GDP at market price

1.2. Sectors and its demographics:
India is seen through a prism of rich and complex culture, and bigger than sum of its parts is
intimate with the world; vibrant society leading in Pharma, Science, Biotechnology and IT
services. While many countries are batting with low growth reviving from economic crisis,
To equip for the growing needs of future, the most ambitious ‘Make in India’ pro-
manufacturing policy has come of age to lift the manufacturing contribution from 17% to
30% of GDP by 2025. For investors, such national initiatives like ‘Digital India’ became
bright spot. But still there is a lot to do-“Never discount the past while embracing the future
with unwavering confidence in its ability to shape it and harness its potential” (Lagarde,
2015). Very few sectors especially manufacturing sector underperformed in the last years,
but the reforms in regulatory mechanisms like B2B and G2G are easing hurdles in the aimed
direction. Getting rid of Red tapism, Crony capitalism, and corruption with transparency in
the system are agendas of the government to improve performance.
Figure 5. Employment numbers by sectors in India 2010, Wikipedia
Figure 6. Sector shares to India’s GDP 2010, Wikipedia

1.2.1. Agriculture:
India ranks 2nd
worldwide in farm output and at the same time a huge consumer. The
agriculture has steeply fallen since 1951 contributing only 14% currently (Wikipedia, 2015).
The landmark revolution transformed the nation’s chronic dependence on grain imports to a
global agri-powerhouse. Since then health conditions and literacy rates have quadrupled. In
agri-exports India positioned at 10th
globally. However, poor infrastructure and unorganized
retail are causing highest food losses in the world.
Figure 7. Major cultivation areas by states and crops, Wikipedia
Indian exports includes Rice, Wheat, Sugarcane, Jute, Cotton, etc. as global leader. Products
like Basmati rice, fruits, meat, fisheries, tea (15% of global trade) and other cash crops earns
10% total exports. Impending water resources gave fisheries sector six million employment.
1.2.2. Industry:
Economies of scale are enjoyed by manufacturing sector (Vardoon law, 1949), which is also
served by agri-byproducts supply. According to Engle’s law, if income elasticity of food
sector is low then change in income growth will be high in industrial goods and not on
increase of agricultural goods so that industries can utilize the overall demand. India
bypassed industrialization with rapid growth on services. In India, industry contributes 26%
of GDP and 22% workforce by 2013-14 (figure 6). Among them, the textiles employs the
most labor force. A glance at India’s 500 most valuable companies reflects 90 % of the
market capitalization of Bombay Stock Exchange, where 2/3 are family-owned
conglomerates or “business groups”. They hold the key for India’s development but
themselves are busy with cronyism, corruption and easy money. A typical example is
Reliance Mukesh Ambani’s billion dollar house next to Mumbai’s largest slum.

Figure 8. “Manufacturing is the Achilles wheel of Indian economy” (Goutam Das, 2014) (Appendix A)
Manufacturing at its upswing will maintain such dualistic nature and if not addressed
adequately then apparent trade-offs between equity and growth may stir more unemployment
in this sector. Nevertheless, ambitious reformer-in-chief PM Modi has relatively increased
investor confidence level to poise growth and make India a uniform-seamless market with
national initiatives, GST bills and pet projects.

1.2.3. Services and Infrastructure:
Figure 9. Services growth rate of different countries in 2013-14, Source: www.thehindu.com
India’s service sector contributed 57% to the country’ GDP since 2001 while its still low
globally only securing 12th
in 2012. But it is at the pace of second fastest growing in the
world (Bhargava, 2015). The non-service sector like Industry, Manufacturing, and
Agriculture remained at 43%. In 2013-14, despite deceleration growth rate was 6.8% in
hotels, restaurants, trade, transport and communications and robust growth of 12.9% pooled
by finance, business and insurance services. The IT services added 46% to the sector. On a
global scale, India’s service share is 3.3% at the end of 2013 against 1.1% in 2000 growing
faster than merchandise trade. The big ticket items in tandem like software and telecom gave
India a brand image in services. The major problem of services sector is mostly the revival
of industry sector, discussed in the parliament last year. The renewed focus is on
privatization of Railways and Port services (Sagar-mala project), Tourism and Hospitality
due to its high employment linkages.
1.3. Foreign Trade situation:
Figure 10 Merchandise Trade balance data- DGCIS and Ministry of Commerce and Industry (RBI, 2014)
India, 9.00
China, 10.90
Japan, 0.60
Germany, 1.20
UK, 2.10 USA, 2.10
France, 1.40
Brazil, 3.60
Russia, 5.40
Italy, 0.40-5
0
5
10
15
Service annual growth rate 2013-14

Exports and Imports of India vs World:
India exported total trade of 470 b$ in FY2013 where the merchandise exports comprised
314b$ (+4.1%) against 300b$ (-1.8%) in 2012-13. The exports are only under 2% of total
world trade. In 2012, the trade deficit ratcheted up 60.93%, hence the Foreign trade policy
2015 is devised to target 900b$ exports in 2020. With a moderation on import policies and
pick up in exports, the trade deficit gone tremendously down given that imports plunged to
450.1 b$ (-8.3%) in 2013-14 against 490.7 (+0.3%) in 2012-13. In 2009-10 the exports
surged 0.57% growth while imports sized down to -0.78% for first time in the decade.
Mineral fuels and Jewelry are top products that are traded in the country. The largest partners
topping the list in terms of Total trade are USA, UAE, China PRP, Switzerland, Germany,
Saudi Arabia and Hong-Kong with variations year to year as drafted in the figure 11 below,
Table 1. Aggregated and compiled excel trade data using Indian stats FY wise and Eurostat Yearly wise –
EU in Billion Euros (BE) and others in Billion dollars (b$)
Top countries list
based on total trade, 2008-14
Currency: In BillionsDollars$
April2008-March 2009 April2012-March 2013 April2013- March 2014
Rank Country
Expor
t
Import
Total
Trade
Trade
Balance
Country Export Import
Total
Trade
Trade
Balance
Country Export Import
Total
Trade
Trade
Balance
1
EU 28 Jan-Dec 29.6 31.35 60.95 -1.75 EU 28 37.52 38.54 76.06 -1.02 EU 28 37.06 35.45 72.51 1.61
2 U ARABEMTS 24.48 23.79 48.27 .69 U ARABEMTS 36.3 39.1 75.5 -2.8 CHINA P RP 14.8 51. 65.9 -36.2
3 CHINA P RP 9.35 32.5 41.85 -23.14 CHINA P RP 13.5 52.2 65.8 -38.7 U SA 39.1 22.5 61.6 16.6
4 U SA 21.15 18.56 39.71 2.59 U SA 36.2 25.2 61.4 11. U ARAB
EMTS
30.5 29. 59.5 1.5
5 SAUDI ARAB 5.11 19.97 25.08 -14.86 SAUDI ARAB 9.8 34. 43.8 -24.2 SAUDI ARAB 12.2 36.4 48.6 -24.2
6 GERMANY 6.39 12.01 18.39 -5.62 SWITZERLAND 1.1 32.2 33.3 -31. SWITZERLA
ND
1.8 19.3 21.1 -17.5
7 SINGAPORE 8.44 7.65 16.1 .79 GERMANY 7.2 14.3 21.6 -7.1 GERMANY 7.5 12.9 20.4 -5.4
8 IRAN 2.53 12.38 14.91 -9.84 SINGAPORE 13.6 7.5 21.1 6.1 HONGKONG 12.7 7.3 20.1 5.4
9 HONGKONG 6.66 6.45 13.11 .2 IRAQ 1.3 19.2 20.5 -18. Indonesia 4.9 14.7 19.6 -9.9
10 SWITZERLAND .77 11.87 12.64 -11.1 INDONESIA 5.3 14.9 20.2 -9.5 IRAQ .9 18.5 19.4 -17.6
11 KOREA RP 3.95 8.68 12.63 -4.72 HONGKONG 12.3 7.9 20.2 4.4 SINGAPORE 12.5 6.8 19.3 5.7
12 AUSTRALIA 1.44 11.1 12.54 -9.66 JAPAN 6.1 12.4 18.5 -6.3 KUWAIT 1.1 17.2 18.2 -16.1
13 U K 6.65 5.87 12.52 .78 KUWAIT 1.1 16.6 17.6 -15.5 BELGIUM 6.4 10.8 17.1 -4.4
14 JAPAN 3.03 7.89 10.91 -4.86 KOREA RP 4.2 13.1 17.3 -8.9 Nigeria 2.7 14.1 16.8 -11.4
15 MALAYSIA 3.42 7.18 10.6 -3.76 QATAR .7 15.7 16.4 -15. KoreaRP 4.2 12.5 16.7 -8.3
16 NIGERIA 1.53 8.9 10.43 -7.37 BELGIUM 5.5 10. 15.6 -4.5 Qatar 1. 15.7 16.7 -14.7
17 KUWAIT .8 9.59 10.39 -8.8 AUSTRALIA 2.3 13.1 15.4 -10.7 JAPAN 6.8 9.5 16.3 -2.7
18 BELGIUM 4.48 5.78 10.26 -1.3 IRAN 3.4 11.6 14.9 -8.2 UK 9.8 6. 15.8 3.7
19 INDONESIA 2.56 6.67 9.23 -4.11 U K 8.6 6.3 14.9 2.3 Unspecified 11.5 4.1 15.6 7.4
20 NETHERLAND 6.35 1.91 8.26 4.43 NIGERIA 2.7 12.1 14.8 -9.3 Iran 5. 10.3 15.3 -5.3
21 ITALY 3.82 4.43 8.25 -.6 MALAYSIA 4.4 10. 14.4 -5.5 VENEZUELA .2 13.9 14.1 -13.7
22 IRAQ .44 7.71 8.15 -7.27 VENEZUELA .2 14.1 14.4 -13.9 Malaysia 4.2 9.2 13.4 -5.
Top 25 exc EU 134. 246.8 380.7 -112.8 Top 25 exc EU 202.7 402.3 605. -199.7 Top 25 exc EU 210.5 365. 575.5 -154.6
India's Total 185.3 303.7 489. -118.4 India's Total 300.4 490.7 791. -190.3 India'sTotal 314.4 450.2 764.6 -135.8

Figure 11. India's list of EXIM and top trading partners, The Guardian News 2013
EU, as a single market is still the largest trading partner for India. The IT service industry
and pharmaceuticals were less susceptible to damage throughout the years, but other sectors
like automobiles, chemicals and textiles are facing challenges because the European Union
is slowing down. The ports majorly used to export the engineering goods as of 2012 are
Nhava Sheva, Mundra, Kolkata and Chennai. Nhava Sheva also dominates chemicals, RMG-
textiles, leather, minerals and coal exports. Major POL are traded through SEZ Jamnagar
(world’s largest refinery) and Mumbai port which is also hub for transport equipment while
Pharmaceuticals and Gems via Mumbai Air. The major import hubs are Nhava Sheva,
Chennai, Mumbai air and Delhi air.

Figure 12. India’s Exports contribution to different countries and % Shares 2011-14, Source: Compiled
from RBI and DGCIS data 2015
The exports to UAE and USA had sustainable growth with 10-15% total share while China
being pushed down and also UK fell whereas Netherlands and Belgium climbed up during
2009-12. These countries clearly have good appetite for Indian goods. Among the others
engineering goods, petroleum products and gems&jewelry are major exports. Engineering
goods at 22.2% of total exports have sustained since 2009 and contributed significantly with
robust performance in transport equipment and iron&steel. The textiles like readymade
garments, cotton yarn and fiber sharply rose in 2013-14 mainly due to competitive edge and
improved global demand. The Gems fell in 2013-14 to 13.1% from 14.7% in 2011-12, which
can be explained partially on the global gold price softening around 20% in 2013-14.
China
PRP
UAE USA
Singap
ore
Hong
Kong
Nethe
rlands
UK
Germa
ny
Belgiu
m
Saudi
Arabia
Brazil Italy
Indon
esia
Japan
2009-10 6.47 13.41 10.93 4.25 4.41 3.58 3.49 3.03 2.1 2.19 1.34 1.9 1.73 2.03
2011-12 5.98 11.75 11.36 5.48 4.22 3 2.82 2.59 2.33 1.86 1.88 1.59 2.19 2.08
0
5
10
15%
% contribution share of Exports
2009-10 2011-12

Figure 13. India's Imports contribution from different countries and % Shares 2011-14, Source: Compiled
from RBI and DGCIS data 2015
The European Union exports share was at 11% falling in FY2012 and consequently picked-
up. Countries like Germany, Italy, Belgium and UK showed improvement. The importance
of Chinese goods in India is evident where growth of 34% during 2008-14 registered.
However in 2009-10 the growth declined by -1.1%. UAE, the second largest partner had the
same impact as of China in CAD terms due to global oil and gold prices. Between 2007 and
2012, Swiss imports rose by 3.2 times but sharply declined by 42% in 2014. Switzerland
China
PRP
UAE
Switze
rland
Saudi
Arabia
USA Iraq
Kuwai
t
Austr
alia
Germ
any
Indon
esia
Nigeri
a
Iran Qatar
Korea
RP
Japan
2009-10 10.7 6.7 5.1 5.9 5.9 2.4 2.9 4.3 3.6 3 2.5 4 1.6 3 2.3
2011-12 11.2 7.5 7.2 6.6 4.8 3.9 3.4 3.2 3.2 3 3 2.8 2.6 2.6 2.5
0
5
10
15
%
% Contribution share of Imports
2009-10 2011-12

accounted 52% of total Gold&silver import in 2013-14. Other import partners maintained
moderate growth like Japan and Indonesia. Qatar earned its position from 20th
to top 10 in
2007-12. POL, Gold&silver and Electronic goods are the top notch import products. In
2013-14 POL accounted for 36.7%. The global improvement and trade in volume has
revived India’s export performance bridging the trade deficit to 137.5 US$ in 2013.
International commodity prices were subdued in 2014 according to IMF and the rupee
appreciation is in favor of India.
Figure 14. WTO trade profiles of India and EU, Source: WTO Report 2014
India’s trade with the world in terms of Imports, Exports, 2013
EU trade with the world in terms of Imports, Exports, 2013
For the European Union side in 2013, the top players of extra-EU trade were USA (14.2%),
China (12.5%) and Russia (9.5%). Mineral products, transport equipment, and machinery
appliances were the major products involved in commercial trade. European Union managed
to trade in value wise around 3.420 trillion$ in 2013, where India far behind at 11th position
amounting 72.6 b$.
17%
12%
10%
5%
4%
52%
Exports
European Union
USA
UAE
China
Singapore
Others
11%
11%
8%
7%
5%
58%
Imports
China
European
Union
Saudi Arabia
UAE
Switzerland
Others
27%
20%
19%
9%
9%
5%
5% 3%
3%
% Share of EU Imports
China
Russia
USA
Switzerland
Norway
Japan
Turkey
8. India
South Korea
16.6
9.8
8.5
6.9
4.5
3.1
2.9
2.6
2.3 2.1
% Share of EU Exports
USA
Switzerland
China
Russia
Turkey
Japan
Norway
UAE
Brazil
11. India

2. Growth analysis EU vs India:
The European Union is an important trading partner where a substantial progress is seen
since 2007 in total commercial trade. The value grew to 72.7 billion $ in 2013 and service
trade quadrupling to 22.7 b$ in 2012. The ease of doing business in India is ranked at 142
globally, where China stands at 90. This trade regime and regulatory measures in India are
still huge hindrances as the bureaucratic processes makes the business environment non-
conducive (World Bank, 2015). The market access in both commercial and service goods
can be countered once the BTIA (Broad-based Investment and Trade Agreement) gets
approved that is under negotiations since 2007, will substantially ease import licensing, tariff
barriers and quantitative restrictions.
Figure 15. Imports and Exports EU with India in billion euros, 2007-13 / Source: EUROSTAT and EU-
India Trade report 2013 (European Commission, 2015)
EU-India total value
and quantity analysis 2008-13
The trade deficit between India and EU was in favor of EU in 2008 amounting to 1.724bE
and 1.013bE in 2012. But for the first time since 2000, the Current account deficit (CAD)
for EU was around -1.019 bE in 2013 because of the manufactured and chemical goods that
picked up in Indian export sector since 2011 and the crisis partly. The EU exports that
showed a healthy growth in terms of relative variation between 2012 and 2013 are Arms and
ammunitions at 122.4%, Arts, plants & antiques at 90.6%, Footwears, hats & headgears at
19.5% while vegetables fats oils, foods and beverages, and base metals declined by 20%. On
the contrary, India’s exports rose up by 13.1% in foodstuff, tobacco and 14.9% for plastic
and rubber.
2007 2008 2012 2013
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
-5000
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2007 2008 2012 2013
EU_India trade pattern
Imports Exports CAD (m$) Import growth Export growth

Figure 16. Top 5 HS sections in both X and M terms from EU stand view with India trade perspective
2013, compiled from Eurostat
Economies of scale and free market without sector restrictions are the vital sources of
economic growth at the current status-quo. The stalled FTA talks between India and EU,
though both parties having logical claims in their negotiations are going nowhere but futile.
The recent decision by GOI to defer the BTIA talks was based on EU’s ban on sale of India’s
flagship Pharma sector on around 700 products (New Indian Express, 2015). An EU
assessment report claims that this treaty will result in a fair ‘level playing field’ favoring
both the social partners and civil society ensuing fair distribution of benefits (Ecorys
Netherlands, 2010). Sealing this BTTI deal will spur enormous growth and reap the EOS
efficiency benefits. Increased intra-industry trade and integration of these giant economies
needs the political upfront to take pragmatic and swift decisions in the upcoming meetings
over exogenous factors such as trade liberalization, removal of barriers and finding synergies
that results from disequilibrium (Sangeetha Khorana, 2015).
On top, this combined population of over 1.8 billion people bilateral agreement will not only
represent one of the world’s largest treaty, but also will depict EU’s global leadership. As
OECD (OECD Economic outlook, 2002) suggested, Internationalization involves vertical
trading chains for differentiated products and horizontal trading in similar products
(FONTAGNÉ L. et al, 2002). The current trend of EU-India trade will be driven by vertical
specialization of one or more production lines as a comparative advantage. E.g. using cheap
unskilled labor for assembling processes (Gasiorek M, 2007). The following table Grubel-
Lloyd index (Lloyd, 1975), famously used measurement for intra-industry flows between
countries on commodity merchandise exchanges based on standard industrial categories
shows the importance of EU as an external partner to India on SITC product wise. Higher
the value is more significant.
Textile
product
s
Mineral
s
Chemic
al or
allied
industri
es
Machin
eries
and
applianc
es
Base
metals
and
articles
Machin
eries
and
applianc
es
Pearls
and
preciou
s metals
Chemic
al or
allied
industri
es
Base
metals
and
articles
Transpo
rt
equipm
ents
Values in b$ 6.492 5.21 5.055 3.904 3.002 10.202 9.157 3.362 3.171 2.692
Percentage 17.60% 14.20% 13.70% 10.60% 8.20% 28.40% 25.50% 9.40% 8.80% 7.50%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
0
2
4
6
8
10
12
Exports
Imports

Table 2. Grubel Lloyd index, Source. Global economies of scale in EU-India trade agreement, Sangeetha
Khorana et al 2014
Figure 17. Proportional Product and Country shift based on HS sections bet EU and India for years 2008-
12, Source: Claessens E 2007 (Refer to the Appendix B for illustration)
Product groups (SITC Rev 3) 2007 2009 2011
1000—Primary products 0.65 0.7 0.75
1100—Agricultural products (food incl. fish and raw materials)0.42 0.4 0.44
1200—Fuels and mining products 0.81 0.89 0.88
2000—Manufactures 0.91 0.92 0.94
2100—Iron and steel 0.89 0.73 0.96
2200—Chemicals 0.91 1 0.91
2300—Other semi-manufactures 0.69 0.69 0.69
2400—Machinery and transport equipment 0.45 0.59 0.62
2410—Office and telecomm equipment 0.41 0.73 0.81
2420—Transport equipment 0.59 0.97 1
2430—Other machinery 0.39 0.37 0.42
2500—Textiles 0.14 0.15 0.16
2600—Clothing 0.02 0.01 0.02
2700—Other manufactures 0.75 0.84 0.87
3000—Other products 0.55 0.52 0.66
Total (all products) 0.95 0.96 0.99
Table. Grubel-Lloyd index for trade between the EU and India
FR DE NL BE LU UK IE IT GR
M
T
CY PT ES DK SE FI EE LV LT PL CZ SK AT HR
H
U
SI RO BG
PLS 9. -0 52 -1 -3 6. 21 -1 -7 11 -1 -5 -5 -3 -1 21 69 41 -5 7. 19 39 3. 4. -4 44 -3 3.
B1 10 16 9% 13 0% 18 1% 12 2% 0% 0% 2% 7% 2% 2% 1% 0% 0% 0% 2% 1% 0% 1% 0% 1% 0% 1% 0%
-100.00%
-50.00%
0.00%
50.00%
100.00%
150.00%
Consolidation of EU_India Imports
PLS B1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
PPS 3.8 11. -30 17. 68. 33. 12. -10 -33 -2. -22 -12 -20 -1. -43 -7. 13. 25. -16 -20 164
C1 1.6 4.1 0.7 1.5 9.2 10. 2.7 3.7 0.1 0.3 20. 3.4 1.5 7.0 11. 12. 4.5 0.8 0.0 1.7 0.5
-100.00%
-50.00%
0.00%
50.00%
100.00%
150.00%
200.00%
Diversification of EU_India Imports
PPS C1

2.1. EU-India iMports composition growth analysis:
Table 3. Compiled data of EU imports in value from India using A table - Claessens, E. (2007)
Figure 18. Compiled from India-EU trade data using B1 and C1-tables - Claessens, E. (2007). European
Integration: Global Trade & transportation
Top Gateway
Countries
Amounts in
Billion euros
of 2008
Contribution
percentage to
total EU trade
in 2008
Amounts in
Billion euros of
2012
Contribution
percentage to
total EU
trade in 2012
EU-28 29.632 100% 37.527 100%
United Kingdom 5.204 17.59% 6.935 18.53%
Germany 4.807 16.25% 6.082 16.24%
Belgium 3.77 9.88% 4.239 (jumps to 3rd
) 11.34%
Italy 3.429 12.73% 3.749 9.99%
France 2.921 11.58% 3.968 (jumps to 4th
) 10.58%
Total 68.03% 66.68%
Greece 0.541 1.83% 0.286 0.77%
Netherlands 2.722 9.12% 4.874 12.90%
21%
13%
12%
10%
44%
Commodity Share In EU imports from India, 2008
11. Textiles
16. Machinery
15. Base metals and articles
6. Chemicals
Others

Table 4. Top products imported from India in 2008
In the year of global financial crisis, around 30 billion euros products imported from India
to EU28 nations. From table.3 clearly shows the top 5 players who are acting as the gateways
for the European Union. These nations constituted 68.03% of total Indian imports into EU.
The textiles section dominated the imports with UK contributing 1.308 BE, followed by
Germany of 1.129 BE and France with 0.767 BE. The Product diversification index (PDI)
for this section is 86.77%. All these top players have registered positive trade deviations
observed from B2 table. UK and Germany reflected positive deviations as their contribution
to total EU-India imports are as high as 17.59% and 16.25% respectively.
The section 16 Machinery topped second with Germany leading with 23.66%, then comes
UK with 16.7% and Spain at 9.26%. Spain’s total contribution to Indian imports is 7.31%
valued at 2.161 BE. The PDI is 81.02% where only Germany and Spain had positive trade
deviations at 7.4% and 1.9% respectively. The base metals and articles caps the next in the
list constituting 11.90% of total trade. From the C1 table, Belgium leads with positive trade
deviation of 6.83% followed by Italy at 4.23% which are the only countries to have such
greater positive values. The PDI for the section is 83.71%.
United Kingdom trade basket concentration is high with textiles (25.5%) followed by
Machines (12.18%) and Minerals (11.33%). The Land diversification index for UK is
89.95%. In case of Germany, their concentration is also textiles with 23.49%, machinery at
18.68% and chemicals having positive deviations of 2.61%, 5.85% and 4.61% respectively.
France obtained only two products with positive deviations of 5.39% and 13.21% which are
textiles and Minerals respectively. Belgium is more a specialized importer exclusively in
section 14 Gems and Jewelry scoring 38.37% in the 7.03% of its total EU import basket.
They are also dominant in section 15 as they are specialized in importing Stainless steel of
500mm width which is 18.26% of 11.90% total EU basket.
Sections
Amounts in
billion euros
Contribution
in total EU-
India imports
11 6.176 20.88%
16 3.796 12.88%
15 3.521 11.90%
6 3.051 10.32%

Table 5. Top products imported from India in 2012
By 2012, the imports reached an astounding 37.527 billion euros (BE), with UK and DE
securing the same positions. Belgium pushed France with 11.39% and followed by Italy at
5th
place. Belgium, specialized in its trade basket diversified its import equilibrium. This is
contributed by the value added re-exports of gems done from the west coast of India to the
Worlds Diamond hub Antwerp and also rise in stainless steel imports. The top 5 countries
constituted 66.68% of total imports. Greece attributed to the crisis fell halved killing its
imports of food products like meat, fish, animal fodder and mineral products. But at the same
time Netherlands imports doubled to 4.8 BE adding at 12.9% to trade basket. Major imports
were Mineral fuels and animal fat oils.
The textiles section witnessed a slight drop whereas Mineral products captured 2nd
position
valued at 5.36BE with Netherlands (38.95%) and France (20.61%). These are the only
countries with +trade deviations greater than 1. The Chemicals scored 3rd
valued at 4.96 BE
with UK (15.2%), Germany (20.88%), and Spain (9.32%) both having positive trade
Sections
Amounts in
billion euros
Contribution
in total EU-
India imports
11 6.415 17.16%
5 5.364 14.35%
6 4.891 13.08%
16 4.528 12.11%
15 2.913 7.79%
17%
14%
13%
12%
8%
36%
Commodity Share In EU imports from India, 2012
11. Textiles
5. Mineral products
6. Chemicals
16. Machinery
Others

deviations of 4.65% and 2.33% respectively. The section 16 fell slightly. Notably, Spain lost
its share to Netherlands (13.34%) and Italy (8.81%).
When the proportional land shift index (PLS) is cross-checked, Netherlands, Malta and
Estonia accelerated to 52%, 111% and 63.5% respectively between 2008 and 2012
explaining the consolidation happening at these gateways. The proportional product shift
(PPS) illustrates that textiles, base metals and machinery are decelerating at -22.52%, -43.5%
and -7.1% respectively. Mineral products and Chemicals are growing extremely at 68% and
34% respectively complementing its contribution to total import basket.
2.2. EU-India eXports Composition growth analysis:
Table 6. Overview of Exports from EU to India composition and gateway countries
Interesting countries to watch out are Lithuania and EE (Estonia) – 0.86% and 0.05% respectively
Top
Gateway
Countries
Amounts in
Billion euros of
2008
Contribution
percentage to
total EU trade in
2008
Amounts in
Billion euros of
2012
Contribution
percentage to
total EU trade
in 2012
EU-28 31.35 100% 38.54 100%
Germany 8.1 26.29% 10.38 27.50%
Belgium 4.98 16.10% 7.94 21.05%
United
Kingdom
4.86 15.51% 5.2 13.36%
France 3.34 10.52% 3.44 8.63%
Italy 3.08 9.85% 3.34 8.56%
Total 78.27% 79%
36%
20%
11%
9%
8%
16%
Commodity Share In EU exports to India, 2008
16. Machinery
14. Jewelery and gems
17. Vehicles
6. Chemicals
Others

Table 7. Top products exported to India from EU in 2008
As far as exports are concerned, the total exports to India ranged at 31.35 BE with a healthy
CAD of 1.4 BE for EU in 2008. The top players in this context are Germany, Belgium (and
Luxemburg), UK and France. Germany dominated in machinery and in base metals exports
with trade deviation of 17.59% and 0.09% respectively against its LDI of 77.15%. France
concentrated only in vehicles 17 section with a share of 45% and a trade deviation of 35%
becoming a specialized trade basket with LDI of 62%. UK has high trade deflection in base
metals, Gems and in mineral products while its total contribution is 15.5% in exports baskets.
In Gems and Jewelry, Belgium and UK are the leg dominant constituting 62% (3.7 BE) and
36% (2.19 BE) respectively. Belgium with PDI of 32.98%, is special gateway for precious
stones and metals. In section 15 of base metals, Germany (26.49%) followed by UK and
Italy are the top 3 players with only positive deviations of this product. Germany contributes
26.29% to EU total export basket which is equal to its specialization in base metals. In
Machinery trade, Germany leads followed by Italy and UK at rate of 39.12%, 14.62% and
8.76% respectively. Germany managed to produce a positive deviation while UK at -6.74%
is very low for a country with high export contribution to India. Noticeably, in arms and
ammunition the lowest PDI has been observed to be at 15.26% which are exported almost
74% from Sweden is considered to be specialized with trade deflection of +69.83%.
Table 8. Top products exported to India from EU in 2012
In 2012, the top exporters remained unchanged but rather with slight variations constituting
79% of the overall exports, and the value escalated up by 20% to 38.5 BE. The trade relation
is still growing strongly except for countries like Lithuania dropping from 0.86% to 0.04%
which is when analyzed exposed that fertilizers completely dropped to nil. Germany and
emerging markets like Romania secured the fertilizing exports, while Spain almost doubled
its exports from 0.765 BE to 1.259 BE (3.34%).
The section machinery grew well with Germany having a greater deviation of 13.87% but
UK dropping to -3% showing that they are diversifying. In Gems and Jewelry Belgium seems
Sections
Amounts in
billion euros
Contribution in
total EU-India
imports
16 11.15 36.04%
14 6.04 19.51%
15 3.57 11.55%
17 2.8 9.09%
6 2.6 8.37%
Sections
Amounts in
billion euros
Contribution in
total EU-India
imports
16 11.61 30.77%
14 8.25 21.86%
15 4.45 11.80%

to have sucked the market form UK since 2008, having a record of 78.61% valued at 6.48
BE and a healthy +deviation of 57.56%. In to the base metals, the same market dominants
contributed and equally increasing their market share except for Italy losing its hand to
emerging economies like Portugal and Austria. The PDI of base metals is 82% where UK
managed to have a +deviation of 8.48% specializing in base metals.
The relative weight of countries and industries when studied from C1 and C2 tables,
Germany exports the most in machinery and becoming an emerging player in new markets
like Vehicles and aircraft parts. Its absolute value 48.84% is higher than 2008. Belgium is
clearly the market leader in Jewelry and precious stones with LDI of 40.24% lesser than
2008 meaning specialization. UK plays a vital role in the same as well with a +deviation of
11.21% and has LDI of 80% diversifying its trade basket. France, though struggling to
sustain became a specialized trade basket in Vehicles sector with 73.92% of LDI, greater
than 2008.
2.3. Market share, SWOT and Snapshot analysis for Printed Books:
In the last decade, paper industry has seen unprecedented growth in the western countries
and is expected to shoot up in the future. Leaders of this market are focusing into eastern
markets as a strategic shift, where the growth ratcheted up from 25 to 30% in 2012. India
accounts 2.6% of the global production. The global average profits are at 5%, whereas in
India it seems to be lucrative yielding of 12% gains. Despite the low domestic consumption
compared to the population rate, India is a bullish market for paper industry. Already 75%
acquisitions happened in AAPM (Andhra Pradesh mills). Most of the units are privately
owned, so the access to the market is wide. The operating capacity are at 12.75 MT annually.
During the FY13, around 10 Kg per capita consumption was pegged. It is expected to reach
14-15 Million tons in FY2015, where most of the demand are for P&W papers (IPMA,
2015).
Figure 21. Turning the page on India paper industry, Deloitte Report 2012

Figure 22. Strategic road map for Paper industry growth, Source - IPMA, Government of India (GOI)
Figure 23. Paper industries demographic location in India, Source: www.mapsofindia.com

Given the market conditions, a market share and snapshot analysis is performed to
understand its importance of Indian paper imports. With an in-depth analysis of the printed
books chapter 49, a snapshot analysis has been performed to understand the overall
performance of this particular sector. In the EU imports from India, the situation is a Lucky
girl favoring the Indian export market of paper industry depicting PRC going down and
relative competitive price low between years 2008 and 2012. The economic decision is price
elastic appearing good for Indian printed books exporters. The market share of both %
tonnage and % EUR is high between these years. This shows that Indian exports have
increased substantially in both terms showing the importance of paper goods in EU market
from India (Refer Appendix B to understand snapshot terminologies).
Figure 24. Compiled snapshot of EU Imports from India and World for HS 49 product, Source:
EUROSTAT, Claessens (2007)
Figure 25. Compiled snapshot of EU exports to India and World for HS 49 product, Source: EUROSTAT,
Claessens (2007)
EUR Ton EUR/kg EURworld Tonworld EUR/kg Pcomp Pcomp/PW PRW PRC %-EUR %-ton
2008 148341752 9490.8 15630.06 5675636663 896519.4 6330.75 6231.25 0.98 2.47 2.51 2.614 1.059
2012 103138540 10878.9 9480.60 5861314290 841336.8 6966.67 6933.74 1.00 1.36 1.37 1.760 1.293
%EUR 2.614 1.760
%ton 1.059 1.293
2.469 1.361
tricky gambler
0.000
0.500
1.000
1.500
2.000
2.500
3.000
0.000 0.500 1.000 1.500 2.000 2.500 3.000
Snapshot
"value" "ton"

Figure 26. SWOT analysis composed from harmonizing literatures (Deloitte-India, 2012), Market shares
and Snapshot analysis
CHINA (PEOPLE'S
REPUBLIC OF),
33%
UNITED STATES,
32%
HONG KONG, 8%
CANADA, 3%
SINGAPORE, 2%
INDIA, 2%
JAPAN, 1%
MALAYSIA, 1%
Israel, 1%
UNITED ARAB
EMIRATES, 0%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
IMPORT Market share of EU-HS 49, 2012
Market share EU
Imports, 2012
STRENGTHS: OPPORTUNITY:
1. Must-enter market – 6% growth YOY–widespread
mills demographically
1. Packaging industry – 22 to 25% growth annually
2. Degradedforest lands aroundmills are providedfor
pulping economic activity under agro-forestry initiative –
40,000 hectares in 2011
2. Upstreammarket demandfor tissues, coatedandmedical
grade papers growing
3. Large pool of skilledandunskilledlabors
3. 100% FDIallowedfor entire value chain of the paper
sector
4. Growing middle class andin education sector – 74%
literacy rate in 2011
4. Relaxation of import duties for recycledpaper
5. Growth in publications – 130,000 printing presses and
CAGR 16.2% since 1989
5. Just 2.1% exports of total production
6. Traditional export regions – Middle east, Africa and
South Asia
6.A lucky girl snapshot – Competitive price (PRC) is lowfor
EUmarket – paperboards, specialty andpackaging products
have goodscope on exports to EU
WEAKNESS: THREATS:
1. Per capita consumption remains low– US at 770 and
EUat 363 lbs. in 2010
1. IPMA says 21% of fiber sources comes fromagro-
residues leading to poor quality of finishedgoods
2. Less fiber andwoodavailability due to declining forest
lands
2. Reduction of paper consumption in western countries
leading higher prices for imports
3. Lack of recycling industries andinfrastructure pales
in comparison with developednations
3. High profile disputes in landacquisitions andunclear
guidelines – e.g. TATA, POSCO shifting to Gujarat in 2010
4. Large gapin Supply to local demand
4. Obsolete or outdatedtechnologies – less than 25 mills
produce 50,000 tons
5. Exports restrictedto books andprintedmaterials for
quality-sensitive markets like EUandNA 5. China – 33% market share vs 2% of India to EU

At the same time, the snapshot analysis performed for the EU exports to India in the same
sector shows a Tricky gambler for EU trade side as there is slowdown in PRC and in %value
while %tonnage rose up. This illustrates a Price-inelastic economic decision and a strategic
market penetration where elasticity is prone to change in the following years, trickling down
for certain crux to be explored.
The EU 28 is a 3.2 BE paper importing market. The majority of its imports comes from
China at 33% whereas India only at 2%. Indian paper exports even during the crisis did not
get much affected as much as this sector is concerned. The key challenges in the Indian paper
industries could be summarized as obsolete technologies, lack of raw materials especially
wood, lack of skilled labor and economy of scale benefits where a holistic approach at the
organizational level is demanded.
From the SWOT analysis, we can conclude that there are immense opportunities in Indian
paper industry both for exports and local production. Impacting positively to the Green
policy of the GOI, 80% of the wood requirement comes from farm-produced. The
geographical spread of the industry is in regional balance of both production and
consumption, whereas exports have easier infrastructure access to the coastal regions. Since
these industries are small to medium factories using outdated to modern technology for
production and other findings like market demand and regulations, the ease of entry for
foreign companies to do joint ventures or acquisitions are high especially in the paperboards,
specialty and packaging products. Though the industry is at beginning of major
transformation conducive policies, raw materials and ease of entry gives big scope for paper
industry in investor friendly states namely Gujarat, Andhra Pradesh and Maharashtra.

3. Indian ports and its Coastal traffic–Trends and Prospects:
3.1. Overview of Modal networks:
Seaports act as a platform for quick and safe transit of goods and people in an economical
manner. As hubs for connection and transshipment, they allow cargoes on different long-
haul routes to be served more efficiently by several ships (Trujillo L. et al, 1999). Ports in
India play pivotal role for her economic development by facilitating international trade and
commerce by acting as an interface between the ocean and land-based transport. Ports are
India’s gateway to the world in this sense. India is major maritime nation by virtue of its
7517 Kms long coast line surrounding western and eastern shelves of its mainland. The
coastline is studded with 13 Major Ports and about 200 Non-Major Ports. India’s Maritime
ranking 16th
globally over the years played a crucial role in the transport sector.
Approximately 95% of the country’s trade by volume and 70% by value are catered through
seas which needs continuous development in the light of emerging scenarios. India ranks
among the top 20 leading merchant fleets all over the world. There are 1213 Indian flag
vessels with a GT of 10.49 million as of 31.3.2014, of just 1% of world share in DWT. But
nearly 43% of vessels are older than 20 years. As per Maritime agenda 2010-20, the Indian
controlled tonnage globally should increase four-fold of 47 MT to attain the target. It
achieved 94% consisting 846 vessels but most of them are non-cargo carriers like tugs,
barges etc. which is an illogical growth driver.
Richly endowed with rivers, canals, backwaters, creeks, etc. about 14,500 km of navigable
inland waterways where 36% are major rivers and 3% canals are conducive for mechanized
vessels. Estimates says more waterways could be used for passenger and cargo movement
for industrial units at banks, creating employment opportunities in near vicinity.
Spanning 64,456 km with more than 7,133 railway stations, Indian railways is largest in Asia
and the second largest in the world (behind US). Rail freight has grown at CAGR 7% over
the past five years. It touched 1 billion ton mark in 2013, with 31% freight against a stark
contrast of 89 % in 1951. Indian Railways generated 15.5 b$ in earnings from freight traffic
during FY14. Earnings growth of 4.9 per cent is anticipated for FY15. However India’s rail
infrastructure suffers from chronic under-investment, by which its potential for freight
movement remains largely untapped.
India has the second largest road network in the world, spanning a total of 4.7 Mkms and
used to transport 2/3rd
of freight traffic and 85% passenger traffic. The Golden quadrilateral,
North-South and East-West corridor connects the land locked markets to the coastline. India
being a large consumer market, the domestic trade flows have largely attracted more road
infrastructures. Logistics cost is a key competitive factor in today’s business to decide the
place of source and distribution hubs. The logistics cost, as a percentage of total EXIM value
is 4-4.5% in the developed countries. The logistics cost in India is 2-3 times higher, being
more than 10% of total imported or exported value (Department of Economic affairs, 2009)

3.2. Challenges and Synchronized measures:
In 2011, 35 out of top 100 ports which handled above 100MT only JNPT made it to the list.
33 PPP projects was awarded and implemented as of July 2014. While India is pushing the
PPP framework extensively drawbacks in the concession agreements, legal wrangling and
illogical biddings by terminal players disrupt the implementation. JNPT, Chennai, Vizag and
Tuticorin ports are finer examples of TAMP tariff and policy issues like cabotage and
competition (Appendix C for illustration). There is still major imbalance flow between
imports and exports especially on east coast, leading to empty containers issue. According
to the Ministry of Shipping, one of the main reason is reduced number of dry ports
(ICD/CFS) in operation (170 of 247) where 40% is operated by public body CONCOR
(Ananth Kishore sharan, 2014). To sustain growth, it is of paramount importance for
CFS/ICD operators to enhance integration with other stakeholders of EXIM supply chain for
seamless movement of container traffic. This enables Indian ports to achieve superior
operating standards. The overall draft depth is only 9 to 14 meters on average, which restricts
bigger vessels to do transshipments leaving the south more vulnerable weaning cargo away
to Singapore and Colombo. The other issues to be main concern are the environmental
clearances, cash flow and traffic constraints. The privatization of container rail operations in
2006 has benefitted but still problems persist. Inter-sector co-ordination and multimodal
injection is lagging, which is key for efficient cargo evacuation.
Neighbored by China- Friends or Foes? The famous saying among the Indian defense forces
goes like ‘China will try to beat India until very last Pakistani and Srilankan’. Chinas
strategic ‘Maritime Silk Route’ could be a deadlock for Indian hawks, and India’s initiative
called Project Mausam cannot serve as a counter. The plausible arguments are to join the
MSR strategically to access landlocked central Asia, to reduce logistics costs for Iran and
Russian oil imports when sanctions lifted.
Figure 27. String of Pearls - Maritime Silk Road encircling India at Indian Ocean, Source: Google

“Think inside the Box” - Government and private participants need to work in tandem to
develop more cargo centers, not only to create balance of economic growth within India but
also to make better viable proposition to bidders to utilize capacity on the eastern ports. Some
of the notable developments in these sectors would be Delhi-Mumbai Industrial Corridor
(DMIC), Chennai-Vizag industrial corridor funded by ADB; NW-6 stretching 121 km
awarded on the Barak River and Jal Marg Vikas on NW 1 for efficient bulk and ODC
transport of goods under World Bank financial assistance (Laursen, 2014). By FY17, across
the river banks 11 thermal power stations have been planned. India is devoted completely to
develop IW on a greener approach. There are state-of –the-art SEZs under development in
various stages in Gujarat, Mumbai, Chennai, etc. connecting to these economic corridors.
The Goods and Services Tax (GST) bill is expected to be passed and implemented from
FY16. As mentioned earlier, this is game changer for logistics which will bring a unified tax
system to relax state border taxes and crippled waiting time for drivers. India’s current
logistics cost is 2-3 times higher than International standards, however GST is expected to
cushion and woo the logistic players indirectly benefiting the consumers (EY GST team,
2015) (For illustrations refer to Appendix D).
Figure 28. Sagar-Mala Road map and 'Make in India' sectors, Source: MOS, GOI 2014
Through the national initiatives, port sector has been opened up for 100% FDI easing
investment caps and controls. The establishment of digital practices through ‘Digital India’
initiative will add highest levels of transparency and business friendly. The existing think-

tank body was reformed into ‘Niti-Aayog’ to serve as policy dynamo for resource allocation,
technical and strategic council. Alike NDRC in China, this body fosters ‘Para-diplomacy’
and also co-operation in tandem with International think tanks. In the port sector, a maritime
cultural initiative called ‘Project Mausam’ established to reconnect with Indian Ocean
countries (Government of India, 2014). This is the crux for ‘Act-east’ to link west policy of
the PMO India. The ‘Maritime agenda 2010-20’ policy targets to create port capacity of
3200MT to handle expected traffic of 2500MT in 2020 (Government of India, 2011). ‘Sagar-
mala’ meaning strings of ports is a strategic port-led and customer oriented initiative which
is by and large the crux of maritime sector policies to increase merchandize trade
contribution of India’s GDP from 42% to highs. This is focused on maximum movement of
goods, port modernization, intermodal connection and hub-and-spoke system across the
identified Coastal economic regions ie.CER (Ministry of Shipping, 2014).
3.3. Dissection of Ports performance in foreign trade:
Ports are essential and service provision units, which in turn needs Intermodal conjunction
for its survival. During 2001-2012, the major ports registered 8.06% CAGR while the non-
major ports at 28.67% which is nearly 3 times higher than the major ports. Currently, in
FY15 the non-major ports expected 43% share from 42% in FY14. A projected increase in
cargo capacity of 2289 MT is estimated by 2017 from 1235 MT in 2012. The chart in
figure.31 (Transport Research Wing, 2015), shows the growth rate of GDP and port traffic
growth in contrast to world seaborne trade since 2007 to 2012. The Indian sea borne trade
grew healthy in FY09 albeit of negative performance on the world maritime trade, and in the
successive years catching up with the world.
Figure 29. Growth rates for GDP and Cargo Traffic Growth comparison with World Output, Trade
Volume and Sea-borne Trade pertaining to fiscal years terms
Source: World Economic Outlook and review of maritime transport, UNCTAD AND IMF- 2013

Figure 30. Indian Port traffic 1980-2014, Source: compiled from www.ipa.nic.in and Ministry of Shipping
During the year 2013-14, the major ports handled 555 MT, while the non-major handled
43% with a CAGR of 8.60% from 2000-2014. Among the 13 major ports, Kandla, Paradip,
Chennai, JNPT, and Mumbai accounted for almost 70% of its total traffic. Eight of the major
ports registered an increase in cargo volumes in 2013-14. Cargo traffic grew the fastest at
Ennore port by 52.9% and Kandla. Cargo traffic at the Paradip port rose by a healthy 20.3%.
The growth at these ports was mainly driven by sharp rise in thermal coal, POL, and
miscellaneous cargo volumes. In contrast, the steepest fall in cargo traffic was seen at the
Mormugao port, by 33.7%.
In the last five years, these privatized non-major ports have been growing at 3-5 times the
rate of major ports, snatching away market share at rate of 2-3% every year. This is evident
from the fact that the market share of major ports, which was 91% in 1995, slid down to 57%
in 2014 (MOS, 2014). The cargo handled by the major ports has increased from 215.34
million tonnes (MT) in 1995-96 to 555.49 MT in 2013-14. During the same period, the cargo
loaded by the non-major ports jumped from 20.3 MT to 420.24 MT. The growth in cargo
handled at minor ports in FY14 was aided by substantial increase in cargo traffic of coal,
containers, building materials, and fertilizers, largely based in Andhra Pradesh and Gujarat.
Gujarat accounted close to three-fourths of the total traffic handled at minor ports during the
year, followed by Maharashtra, Andhra Pradesh and Goa altogether accounting 96%.
Non-major port operators like Adani Ports and Essar operating at Mundra, Dhamra, Dahej,
Hazira, and Vadinar, Haldia, Paradip respectively through SPVs continued to register strong
90.51 165.63
368.5
743.73
933.75 972.6
0
200
400
600
800
1000
1200TrafficinMillion
Tonnes
1980-81 1990-91 2000-01 2008-09 2012-13 2013-14

growth in FY15 in its volumes across all cargo segments. Operational synergies, economies
of scale, lack of legacy burdens in labor and equipment have helped non-major ports notably
Mundra, Pipavav, Krishnapatnam, Gangavaram and Dhamra, weaning away cargo as trade
seeks out new logistic channels on the basis of total logistics costs.
The traffic in Indian Ports has been growing steadily. The Projection in traffic requires a
concomitant increase in the installed capacity of the ports. The aggregate capacity in Major
Ports as of March, 2014 was 805.13 Million Tons per annum (MTPA) where during FY14 a
capacity of 55.61 MTPA been added. The capacity of Indian Ports was 1245.30 MTPA at
the end of Eleventh Plan period (2012). It is targeted to clock port capacity of 2493.10 MTPA
at the end of Twelfth Five Year Plan to handle expected 1,758 MMT (943 MT at major and
815 MT at non major) by focusing strongly on Major Ports.
Figure 31. Major Ports traffic FY13 and State wise cargo traffic FY12, Source - MOS 2013
Table 9. State wise major and minor ports cargo in FY2014, MOS Basic port statistics 2013-14
Kandla
Port
Paradip
Port
JNPT Mumbai Vizag Chennai Kolkatta
Mangalo
re
Ennore Tuticorin Cochin
Mormug
ao
Trafffic 2013-14 87.005 68.03 62.33 59.186 58.503 51.105 41.39 39.36 27.34 28.64 20.89 11.74
0
20
40
60
80
100
Major ports traffic FY13
Non-
Major
Ports
1. Gujarat 87 309 396
2. Maharashtra 122 24 146
3. Goa 11.7 0.2 12
4. Karnataka 39.3 0.5 39.8
5. Kerala 20.8 0.09 20.9
6. Tamil Nadu 107 0.8 107.8
7. Andhra Pradesh 58.5 58.6 117
8. Orissa 68 14 82
9. West Bengal 41.3 - 41.3
10. Pondicherry - 6.2 6.2
11. Sea-islands - 1.26 1.26
TOTAL 555.48 416.9 972.6
State-wise Cargo Traffic at Indian Ports during
2013-14 (Million tons)
Name of the State
Major
Ports
Total

Figure 32. Seaports of India and Commodity breakdown of Major ports handled in 2013 (For Illustration
refer to Appendix E), Source: Ministry of Shipping, India
Containerization:
Container traffic in India has seen a strong growth, increasing from 6.5 Mteus in 2011-12 to
7.46 Mteus in 2013-14, at an annual growth of CAGR 11% (www.ipa.nic.in). Meanwhile,
going through a volatile swinging between 2008 and 2011. Through the years, India has
diversified its trading partners according to its export and import baskets. Among the major
areas of cargoes origin, South leads with 18%, Gujarat with 12% and Mumbai West region

with 12%. JNPT, Chennai and Mundra contributes almost 75% of total containers volume.
According to Drewry Report 2014, Steady growth takes place in exports like electronic
goods and pharmaceuticals in the FY14 while imports of textiles, chemicals and electrical
goods capped in the respective year from Middle, South and Far East nations. Spices and
tobacco products have also risen.
Table 10. Major port wise traffic compiled from Basic port statistics 2013-14, MOS 2014
According to UNCTAD shipping liner index, India reached 45.6 in 2014 from 34.1 in 2004.
Albeit the container cargo movement has seen its decline from competitors like Colombo
and Singapore, India has witnessed accelerated container growth which will traffic 21
Million teus by FY17 (Make in India, 2014). The west coast seems to be dominating in this
sector than the east coast, and with upcoming clusters may flourish JNPT to sit in world’s
top 10 containers by FY 2016. Certain commodities like granite, rolled steel coils, banana,
maize etc. are shifting from traditional break bulk to containers. Container handling on the
east coast of India has increased from 0.9 Mteu in 2002 to 2.8 Mteus in 2012, with a CAGR
of 14% is expected to take 33% (10.8 Mteu) of total container traffic by 2020 significantly
driving port growth (Nimit Malhotra et al, 2013). On the other hand, container throughput at
the west coast ports crossed 7 Mteus in 2012 recording a CAGR of 12% during the same
period. The west coast is more of export based and importing east having an export to import
ratio of 52:48 and 45:55 respectively. Drewry says, the west coast is more prone to increase
in transshipments whilst imports from ASEAN countries will accumulate at the eastern ports
(Behera, 2013). Reefers revenues are crucial as it is 5-6 times higher than normal freights.
Reefer cargos are growing as pharma and agro products exports rising steadily. Increasing
sea food exports to Asian countries like Vietnam, China, Japan and US has reached 1 MT in
2014. KPCT and VCT are fine examples with dedicated maintenance team and 24*7
temperature controlled systems.
000’
Tonnes M.TEUs
000’Ton
nes M.TEUs
Kolkata Dock
System
6960 463 7063 449
Haldia Dock
Complex
Paradip 171 13 99 9
Visakhapatnam 4554 247 4916 262
Chennai 29708 1539 28330 1468
Tuticorin 9372 476 10129 508
Cochin 4607 335 4785 343
New Mangalore 692 48 747 50
Mormugao 258 20 236 19
J. L. Nehru 57911 4259 55235 4162
Mumbai 829 58 449 41
Kandla 1935 118 453 29
ALL PORTS 119866 7714 114672 7453
Major Port-wise Container Traffic Handled (in TEUs)
Name of the Port
2012-13 2013-14
2869 137 2230 113

3.4. Coastal Shipping trade 2008-13 based on DGCIS trade data:
3.4.1. Executive summary:
India is blessed with 180 non-major and 13 major ports where 7 and 6 on east and west coast
respectively. India’s coastal hinterland is comprised of five western states and four on the
east coast. “The coastal shipping is done only at 7%. For coastal shipping to realize its full
potential, it is important that issues such as the development of routes, capacity addition and
incentives for shippers and ship owners are adequately addressed. The MoS can foster the
growth with port duties concession and enhancing coastal-specific non-major ports”
(KPMG-India, 2015). The ‘Make in India’ participants and economic corridors like DMIC
and CBIC has attracted large scale manufacturers from around the world to boost economy
and infrastructure streamlined to this cause.
Figure 33. Coastal shipping status globally - MOS Vision document 2015 and Economic databases of
KPMG Analysis
The optimal mode share of traffic evacuation at major ports by coastal/inland water transport
is only 2% whereas it should be 10% (Ministry of Shipping, 2014). In India, around 87%
modal mix of goods are transported via roads and railways today where POL, iron ores and
coal comprises 85%. The core issue for shippers to neglect coastal mode can be summed up
in three forms as longer transit time, return cargo problems and little knowledge about its
cost benefits among local traders. India’s Inland Waterways (IW) remains largely untapped
and underutilized despite its high growth potential, because most navigable waterways suffer
from hazards like shallow water, narrow channels, inadequate terminal facilities and road
links. “The share of India’s inland water transport (IWT) cargo traffic to the domestic freight
movement is significantly lower at 0.5% as compared to China at 8.7 percent, the US at 8.3
percent and Europe at 7 percent” (Ministry of Shipping, 2015).
“The large and resilient economy having array of east and west coast ports could easily
follow the European Union ‘Marco Polo Scheme’ targeted to free 20 billion ton Kms by road
annually and China’s 1 billion tons traffic target for coastal movement. The costs analysis
for coastal shipping says that logistical costs are only about 20 and 40 percent of road and
rail respectively. But a lop-sided funding was provided to land transport sectors from her
fiscal budget, leaving only 6.5% of total expenditure to maritime sector“ (Ministry of
Shipping, 2015)

Figure 34. Cargo movements by Modes and India's modal share 2014, Source -KPMG, Marco Polo, CII
Reuters, Exim India
Figure 35. Preliminary /Indicative Projections of Coastal Cargo for next 20 years, source: MOS Sagar-
mala initiative

Figure 36. Cargo handled at Major and Non-major Ports for 2009-13, Source: MOS 2013
“The west coast handles mostly industrial, finished and POL goods while east coast handling
bulk and mineral products. Changing trade patterns are in the right direction to promote
coastal shipping and IWT. The ‘Others’ section involving containerized, and project goods
are growing moderately yoy while EXIM itself at 7% CAGR. Most of the break bulk demand
comes from coal rich belts of Odisha and Jharkhand exported to Tamilnadu thermal units,
and steel or cement industries of Maharashtra and Gujarat which are also rich in bauxite and
lime. Puducherry on east is rich in silica while Goa, Ratnagiri in Maharashtra, Calicut of
Kerala, Ongole in Andhra Pradesh, Cuttack in Orissa and North kanara in Karnataka has
high depths of iron-ore. There is a huge demand from densely populated areas of North and
Central India where railways and roads are used to cater the needs. Nearly 49% of POL is
handled via coastal shipping originating from Jamnagar, and rest from New Mangalore,
Mumbai, Cochin, Paradeep, Vizag, Chennai and Haldia destined for Haldia, Kandla, Vizag
and Mumbai ports to fuel their industries. The problem that exists with container movements
in the coastal trade is they are mostly intermediate products for industries and not the semi-
finished products” (Ministry of Shipping, 2015).
Globally, maritime transport is considered to be cost-effective and efficient means whether
internal or external. As the global concern on environment is growing, it is imperative to
significantly invest in coastal shipping friendly ecosystem.

Figure 37. Coastal cargo composition breakdown, Source: Vision document for Coastal shipping 2015 and
originally cited from Indian railways, CRISIL, KPMG and MOS analysis 2015
3.4.2. Comparison of DGCIS and IPA statistics:
The Directorate General of Commercial Intelligence and Statistics (DGCI&S) is a pioneer
official for collecting and compilation of India’s trade statistics that comes under the
umbrella of Ministry of Commerce and industry, Government of India. Coastal Trade
Statistics relate to data on Trade Consignments of commodities passing from one Port to
another by water within India (DGCIS&S, 2015). For the coastal shipping analysis purpose,

the publications from FY2012 and FY2013 named ‘Statistics of the Inland Coasting Trade
Consignments of India’ was formally purchased from DGCIS, Kolkata and analyzed
sincerely (Refer to Appendix G for understanding the DGCIS data nature).
The Indian Ports Association (IPA) is a think-tank body for all major ports which comes
under the supervisory control of Ministry of Shipping. This body in collaboration with
Transport Research Wing (TRW) of Ministry of Road transport and highways, Major ports
and various States/Union territories contribute to the publication called “Basic Port
Statistics” annually.
Deficiency of the DGCIS data:
The principal shortcomings of this coastal trade data are as follows,
 Complete absence of coverage of the port-wise data is a significant portion that is
missing. Though the compiled data is between maritime blocks or coastal states,
transactions between ports of same or different maritime blocks are absent.
 The major emphasis is on values (INR) rather than weights. Though there are
unorganized data in metric units for almost 60% of the products, others like HS 23,
40, 44, 57, 64, 69, 84, 85, 87, 89, 90, 94 and 99 products that are coastal traded
between the years 2012 and 2014 have been quantified (except in few blocks) in
terms of pieces, or numbers rather than measurable metric units (Kg or Tons). The
above products together constitute 30% of total value traded via coastal shipping.
 The reporting of the custom houses are sometimes incomplete and under-covered
with time-lags (Behra T, 2006)
 Another major deficiency is that available data from different modes of transport is
not comparable. The basic units of area represented in other modes of transport is not
the same format as used for quantity of goods in coastal trading. In the case of river-
borne data, only available information of West Bengal block is compiled in quintals
and for rail borne trade there is no data provided in terms of value. The road-borne
transport of goods is not collected (Saha, 2013).
 Although the uniformity of commodity classification has improved in the recent
years, such pitfalls in the inland trading data practically leaves no room for
comparison with the external trade data from the same Ministry of Industry and
Commerce.
A comparative analysis to their aggregated form of data for both overseas and coastal traffic
has been conducted in this section. In this manner, we can conclude how effective the DGCIS
data is for conducting any feasibility or potential projects on Indian ports. As discussed, the
deficiency in their data structure involves products like food industry residues and wastes,
wood articles, carpets, nuclear reactors and boilers, road vehicles, ships and floating
structures, and miscellaneous products are not quantified in measurable terms. The prime
focus has been given to trade in value rather than weights, from which the above mentioned
products carry 30% of total value in FY2012 and 7% in FY2013. The figure.38 clearly shows
a huge difference of 100 MT in FY2012 and 140 MT in the successive year. In case of

Gujarat and Orissa as well, the DGCIS tonnage is exponentially low compared to the IPA
data collected. While DGCIS data shows the inflows and outflows to the states via coastal
shipping, the port traffic data in terms of loaded and unloaded is missing. Also the
unquantified products may fill the missing holes, but such assumptions are baseless and
unjustifiable towards this wide contradictions between these data. These missing important
characteristics in DGCIS data collection mechanism are crucial and with such inherent
difficulties, it is impossible to get comprehensive information on the inland traffic flows. A
complete picture on the inter-state or inland coastal trade cannot be obtained unless the same
uniformity comes into source documents as used in the foreign maritime statistics. However,
despite such practical constraints an extensive analysis have been tried to give the readers an
overview and some interesting findings of the Indian coastal trading.
Figure 38. Calculated data for Comparison of Indian Port statistics to DGCIS coastal traffic data 2012-14
Years
Inwardstotal Outwardstotal Totaltraffic Unloaded Loaded Totaltraffic
2012-13 30.68 30.68 61.36 85.63 76.36 161.99
Majorports 53.9 53.1 107
Nonmajorports 31.73 23.26 54.99
2013-14 20.08 20.08 40.16 93.66 67.7 161.36
Majorports 59.77 54.89 114.66
2012-13 0 7.34 7.34 22.09 27.1 49.1
Majorports 4.3 9.1 13.4
2013-14 0 4.01 4.01 23.1 13.79 36.9
Majorports 3.25 7.11 10.36
2012-13 2.48 6.65 9.13 2.2 17.38 19.6
Majorports 2.2 15.3 17.5
Nonmajorports 0 2.04 2.04
2013-14 0 4.59 4.59 2.1 23.2 25.3
Majorports 2.1 19.98 22.08
Nonmajorports 0 3.22 3.22
Source:Basic portstatistics- 2013-14,MOSIndia andIPAIndianPortsProfile2013-14/FiguresareinMilliontons(MT)
Coastaltraffic DGCIS datamatrix Coastaltraffic IPAdata
Gujarat
Orissa

3.4.3. DGCIS data-driven analysis 2012-14:
In this chapter, the coastal traffic movements of different commodities in terms of values is
executed to derive the trade pattern within the country. In 2012-13, inter-state coastal trade
of mineral fuels of HS 27 traded accounted around 6.6 bil $, followed by nuclear reactors
HS 84 at 2.5 billion $. This commodity heavily originated from West Bengal (WB) ports
destined to the southern states namely Andhra Pradesh, Tamilnadu, Karnataka and Andaman
islands due to the nuclear power plants set-up in these regions. In fact, Tamilnadu
Kudankulam power plant is the world’s largest in 2014. WB imported around 90% HS 39
from all the states except Maharashtra, and WB ports also had internal plastics flow
becoming the largest plastic articles importer in this year. In the cases of Gujarat and
Maharashtra, about 50% of total HS 25 salts and Sulphur for Maharashtra being its mass
product shipped from Gujarat ports. As its close-by to industrial zones of Gujarat, Iron and
steel HS 72-73 together with HS 27 mineral fuels also inputted for Maharashtra ports. The
maritime block Gujarat stayed as a major supplier. The maximum beneficiary import-based
east coast states namely Karnataka, Andhra Pradesh and Tamilnadu ports while Maharashtra,
Gujarat and some places Tamilnadu feeding others.
Figure 39. Calculated Inward and Outward coastal traffic in values for 2012-13, Source: DGCIS
WEST
BENGAL
ANDHR
A
PRADES
H
TAMIL
NADU
KERALA
KARNAT
AKA
GOA
MAHAR
ASHTRA
GUJARA
T
ORISSA
PONDIC
HERRY
ANDAM
AN-
NICOBA
R IS
LACADI
VE-
MINICO
Y IS
OUTWARD 2848.10 825.40 398.25 1089.37 230.79 6.83 1521.11 4113.65 440.48 5.08 13.33 .00
INWARD 1390.16 5670.63 1684.29 163.97 1386.03 .00 249.05 .00 117.78 .00 153.81 676.98
.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
Inward and Ouward movements (In Mil. $) 2012-13
OUTWARD INWARD

During the year 2013-14, products like ores, ashes and mineral fuels have seen a 10-15%
increased growth. The maritime state West Bengal imported almost 90% of its total imports
from the Andaman and Nicobar islands where major products like Edible fruits & nuts, Oil
seeds and wood articles contributing entire import for West Bengal. In turn WB exchanged
industrial raw materials like Mineral fuels, iron and steel also from Tamilnadu (TN) during
this period, whereas to Andaman islands are project logistics pooled for the solar power
project commissioned at Port Blair of the islands (Kumar, 2013). The inter-state movement
of mineral fuels and oils that quadrupled from previous year traded mostly within Andhra
Pradesh, Maharashtra, and TN but most certainly AP imported most of this product covering
70% of total mineral fuel coastal trade. HS 27 during this year prospered to 7.8 Bil $.
For Maharashtra, major importing partners stayed the same as previous years namely
Karnataka, Andhra Pradesh and Tamilnadu and imported Salts and Sulphur from mineral
rich Gujarat. It is also evident from the data that Maharashtra increased its coastal trade
substantially from Kerala accumulated by internal movements of mineral fuel and oil within
the state and salt products from Gujarat. The Gujarat ports traded products like Mineral fuels,
Salt and Sulphur destined to its biggest coastal partners (in order): Karnataka, AP and TN
acting as a major export base.
Figure 40. Calculated Inward and Outward movement in values for Coastal shipping in India 2013-14,
Source: DGCIS, India
WEST
BENGAL
ANDHRA
PRADESH
TAMIL
NADU
KERALA
KARNATA
KA
GOA
MAHARA
SHTRA
GUJARAT ORISSA
PONDICH
ERRY
ANDAMA
N-
NICOBAR
IS
LACADIVE
-MINICOY
IS
OUTWARD 663.97 403.65 1380.16 1094.60 1170.00 2.38 1932.86 1831.27 142.86 .00 14.13 .00
INWARD 8.57 4464.60 1506.03 167.30 994.44 .00 262.06 .00 .00 .00 405.56 827.30
.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
4000.00
4500.00
5000.00
Inward and Ouward movements (In Mil. $) 2013-14
OUTWARD INWARD

The following tables are the calculated excel data files using the same DGCI&S trade
statistics, by which a comprehensive matrix between these coastal states are sorted for clear
understanding about the coastal trade movements between these years. Andhra Pradesh
stands out to be the most inwards focused state importing mineral fuels and salt&Sulphur
from Gujarat and Maharashtra. Tamilnadu struggled with exports in FY2012, but revived to
find balance in the FY13 by trading mineral fuels with its neighboring states and finally
Maharashtra outpaced Gujarat ports in this year. The Indian railways catered to almost most
of these destinations weaning away the coastal cargo due to the reasons explained in the
executive summary sections. This has been also taken into consideration while working out
the case studies on Gujarat and Orissa states (Refer Appendix F for trade movements by
railways).

Table 11. Compiled data for the two successive Fiscal years in tonnage - Source: DGCIS Inland Coastal
trade publications of 2012-13, 2013-14 – Note: 1 US $ = 63 INR and Source: DGCIS, India
Value and Tonnage
Matrix
MARITIMEBLOCKOUTWARDINWARDMARITIMEBLOCKOUTWARDINWARD
WESTBENGAL68690471900172WESTBENGAL150081424121
ANDHRAPRADESH49889578466342ANDHRAPRADESH28942006536239
TAMILNADU70599714154890TAMILNADU21576688056012
KERALA1173577636795KERALA1739807537717
KARNATAKA5257173431839KARNATAKA13916902894919
GOA86330GOA30000
MAHARASHTRA2364595961892MAHARASHTRA39919732433565
GUJARAT73447470GUJARAT40168220
ORISSA6653148248720ORISSA45917080
PONDICHERRY199520PONDICHERRY00
ANDAMAN-NICOBARIS18772280162ANDAMAN-NICOBARIS548661032682
LACADIVE-MINICOYIS0592330LACADIVE-MINICOYIS0827294
TOTAL3067314230673142TOTAL2234254822342549
ComparisonofInwardandOutwardMovementsofInlandCoastalTradeConsignments(inTonnage)of
India
2012-132013-14
Figures:inTonsFigures:inTons

Table 12. Coastal shipping trade matrix in values for 2012-14, Source: DGCIS trade data, India
Importedfrom→→→Inward(M)Movements→→→→
MARITIMEBLOCK
WEST
BENGAL
ANDHRA
PRADES
H
TAMIL
NADUKERALA
KARNAT
AKAGOA
MAHARAS
HTRAGUJRATORISSA
PONDICH
ERRY
ANDAM
AN-
NICOBA
RIS
LACAD
IVE-
MINIC
OYIS
TOTAL
IMPORTS
ExportedWESTBENGAL7.69606.11165.6637.240.676.1638.04199.32284.53.12.46.1397.83
↓ANDHRAPRADESH2374.2818.96209.0752.06147.41.98.172726.8257.665.09..5689.53
↓TAMILNADU305.18121.6984.38273.1116.6.71172.11695.5898.35..93.1768.66
↓KERALA.......12163.83....163.95
KARNATAKA33.679.873.8.12..1198.4763.04....1386.1
MAHARASHTRA..3.1541.91...203.94....249.
ORISSA.16.35..26.12.14.2361.11....117.8
↓ANDAMAN-NICOBARIS135.021.4117.35.........153.78
↓LACADIVE-MINICOYIS...676.99........676.99
2855.77844.4482.621089.39230.86.871521.154113.64440.535.0913.39.11603.64
VALUEINMillion$(1US$=63INR)
TOTALEXPORTS
CoastalShippingTradeofallcommoditiestogether(valuein$)bymaritimeblocksofIndiaduring2012-2013
Outward
(X)
Movemen
Importedfrom→→→Inward(M)Movements→→→→
MARITIMEBLOCK
WEST
BENGAL
ANDHRA
PRADES
H
TAMIL
NADUKERALA
KARNAT
AKAGOA
MAHARAS
HTRAGUJRATORISSA
PONDICH
ERRY
ANDAM
AN-
NICOBA
RIS
LACAD
IVE-
MINIC
OYIS
TOTAL
IMPORTSExported
toWESTBENGAL.36..01.....34..8.21.8.93
↓ANDHRAPRADESH420.09555.561104.898.561150.3.714.79901.2774.79..02.5020.18
↓TAMILNADU112.82372.2453.8954.5519.742.38406.06464.2168.07.5.97.1559.93
↓KERALA.09......03167.23....167.35
KARNATAKA.15.83.6963.59..811.98102.43....994.52
MAHARASHTRA.15.63.50.59..458.5195.81....720.54
ANDAMAN-NICOBARIS130.88.274.63.........405.51
↓LACADIVE-MINICOYIS...827.38........827.38
664.25959.261434.021094.671170.042.382391.361831.29142.86.14.2.9704.33TOTALEXPORTS
CoastalShippingTradeofallcommoditiestogether(valuein$)bymaritimeblocksofIndiaduring2013-2014
Outward
(X)
Movemen
ts
VALUEINMillion$(1US$=63INR)

Table 13. Coastal shipping trade matrix in Tonnage for 2012-14, Source: DGCIS trade data, India

3.4.4. Case Study:
Gujarat:
The state Gujarat, is a prime example for port-led development that adopted vigorous
reforms and privatizing ports for specific industrial purposes as early as in the 90s. The major
port Kandla and private ports like Mundra and Jamnagar among others are the cash-cows
handling almost 90% of the state traffic. This has led to wariness that are foreseen by many
experts and institutes, demanding robust measures against any unprecedented changes in the
market.
Figure 41. Gujarat Coastal Map showing the ports, Source: Google
Both the consecutive years, Gujarat ports catered to the needs of maritime states as an export
hub with no imports for the state. Between the years FY2012 and FY2013, there has been a
decline of YOY 45% in the tonnage context sliding down from 7.3 Million tons to just 4 MT
in the end of March 2014. The major commodity Mineral fuels constituted 70% in FY2012
and 42% in FY2013 respectively via sea to Maharashtra and Southern states except Kerala.
A strong exponential growth of 1093% can be found in iron ores and ashes with demand
surging from Karnataka and Maharashtra in the successive year. In HS 72, the major trade
partner Maharashtra reduced its imports by 80,000 tons in both plates and rolled coils. In HS
73, sudden demand of Containers for Liquefied petroleum HS7311 from Maharashtra
contributed the boost in this chapter.
Ceramic products are concentrated onto Kerala, while Salt and Sulphur HS 25 mostly to
Maharashtra and Karnataka. On a YOY analysis in this chapter Karnataka imported a
positive growth, but Maharashtra though the biggest buyer of salt and cement reduced its

imports by half of its previous year tonnage from its neighboring Gujarat. Tamilnadu imports
also reduced in same manner. Overall, Gujarat ports have catered to the needs of all the
southern states and acted completely an export port as far as coastal shipping is concerned.
While during the same period, Gujarat railways had catered 16% and 32% inward and
outward movements of the hinterland region within the state, whereas to and from the
Gujarat ports the freights movement registered -50% and 29% through the railways in a
positive prospect. The railways continued to grow strongly and clocked around 8% annual
growth from 85 MT to 93 MT between these years. The major inward movements to Gujarat
and its ports came from landlocked regions such as Madhya Pradesh, Chhattisgarh, Punjab
and Haryana while exports through railways happened to be reaching Uttar Pradesh,
Haryana, Rajasthan and even the catchment entered bordering Maharashtra premises. Refer
to the excel data file for elaboration.
Figure 42. Tonnage flow composed for Gujarat from DGCIS Coastal data 2012-13 and 2013-14 – India

Table 14. Blow up of coastal traffic for Gujarat and commodity flow for the years 2012-14,
Microsoft Excel
Worksheet

Orissa:
Orissa also called as Odisha ports sitting on the east coast, serves the eastern and central
parts of the country. The major port Paradeep handles mostly bulk cargoes like coal, iron
and steel catering to the needs of the power plants around this region. In FY2012, nearly
190,000 tonnes of iron ores, 42,000 tonnes of HS 25 together with 9,000 tonnes of inorganic
chemicals from Gujarat were imported, which fell to 0 in the consecutive FY2013. The
following fiscal year no inward movements took place. On the export movement, HS 27 is
the largest product transported through this modal network, contributing 91% of 6.3 MT in
FY2012 and 4.6 MT in the following year showing a decline in its growth. The trade
destination are Tamilnadu followed by Andhra Pradesh ports. The overall YOY growth in
coastal shipping plunged from 6.9 MT to 4.6 MT at -33% rate between 2012 and 2014.
Figure 43. Orissa Map showing Paradip port, Source: Google
The freight movement in the railways into Odisha came from Andhra Pradesh, Chattishgarh
Jharkhand and mainland West Bengal comprising majority of the inbound volumes in both
the years. The outbound volumes for both years in rail mode ratcheted up to 100+ Million
tonnes to regions mainly West Bengal, Jharkhand, Chhattisgarh and Andhra Pradesh given
the reasons of proximity and reach to the hinterland for its catchment area. Refer to the excel
data file for elaboration.

Figure 44. Tonnage flow composed for Orissa from DGCIS Coastal data 2012-13 and 2013-14 – India
Microsoft Excel
Worksheet

Table 15. Blow up of coastal traffic for Orissa and commodity flow for the years 2012-14, Source:
Compiled using DGCIS coastal data

Figure 45. Demographical location of Steel, Pharmaceuticals, Petrochemicals and Textiles industries of
India, Source: Maps of India

3.4.5. Findings and Recommendations:
Consumption of steel directly indicates the economic progress of country. In FY12, inter-
maritime trade of iron ores and slags increased from 1.538 MT to 2.255 MT in FY13, and
articles of iron and steel from 0.06 to 0.27 MT respectively. But HS72 iron and steel coastal-
trade fell from 0.14 to 0.063 MT where most of them are concentrated from Gujarat to
Maharashtra which showed -64% YoY growth in its outwards movements. During the FY13,
the iron ores and other raw material sourced for producing steel hit high price worrying the
steel plants and especially the shutdown of the steel plant ‘Electrotherm’ in Kutch district of
Gujarat producing 360,000 TPA due to environmental issues slowly affected structural and
stainless steel movements from Gujarat (Business standard, 2012). This contributed by
increased input costs, shrunk local demand in 2013 and shut down of 10 mills in Jalna,
Maharashtra stirred anti-steel production sentiments in the west coast (Gadgil, 2013). While
the iron ores price globally dropped 152$ to 50$ per ton in 2013, the ban on iron ore mines
during these years and lack of import barriers on cheap Chinese steel imports forced plants
to run under capacity (Bhupta, 2015). Mineral fuels constituting larger Gujarat exports also
fell by -67% especially to Andhra Pradesh. In contrast the east coast mainly Orissa and West
Bengal are rich in iron ores contributing 70% of total steel production in the country. Though
the mineral fuels had fall of -27%, plastics exports completely fell in FY2013. The then
crisis-hit Haldia Petrochemicals ltd in West Bengal where all Orissa plastic exports destined
to, and its frequent shutdowns in these years could forge as reasons behind (TNN, 2013).
Based on reviewing the ‘Coastal vision document by MOS 2015’ (Ministry of Shipping,
2015) and ‘Sagar-mala’ initiative, the Government plans for improving the coastal and IWT
cargo movements are explained with additional recommendations in the following,
The GOI aims to achieve 10% modal mix share by Coastal shipping and IWT together by
FY2020 demanding a CAGR of 23%, from current coastal cargo level of 172 MMTPA to
600 MMTPA. Highly ambitious, but such target is not only achievable but also matches her
economic growth. A structured approach had been used to identify potential cargo varieties
that could be shifted to reap scale and efficiency benefits. Weighted analysis based on three
factors namely distance, volume and size used and nearly 9 commodities are found to be
working. These identified commodities can pool in around 20 MTPA with a top up of 1
Million cars annually for coastal shipping. The MOS has sorted out roadmap of availing
incentives to shippers like for ICTT introduced by Kerala Govt, cabotage relaxation and
simplifications of procedures to step up level playing field for Indian flag vessels proposing
modal shift of identified break-bulk, containers and vehicles to coastal shipping or IW
wherever applicable. The identified commodities and proposed routes can help skew the
25% (Gujarat state alone) non-major ports handling of coastal cargo and also ration the 75%
handled by major ports only to other non-major potential ports like Tuticorin, Cuddappah,
Vizag, and Krishnapatnam among others (Ministry of Shipping, 2015).
According to MOS, the identified commodities for coastal shipping will garner additional
10.4 MTPA throughput for Gujarat ports mainly Kandla and Mundra (Appendix F). So it’s
of paramount importance to optimize these ports for the incoming traffic. The outlook for

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