Huge potential to make inland water transportation in India viable

1. What if ….Farm 2 Fork
Imagining possibilities in:
Inland waterways, Coastal shipping and Hinterland Connectivity
ManiGR
1

2. Sagarmala Plan and Bharat mala Plan – Takeoff?
Heralding port-led development in India –
– Tepid and lukewarm!
– Inland and coast shipping - not exactly buzz
words!
– The Union Minister for Shipping, Mr. Nitin
Gadkari has put in a lot of efforts
2
However - There appears to be some reservations amongst
stakeholders

3. Historical Perspectives of countries China vs India
India and China – until 17th Century and entry of European
countries into South East Asia
– a continuous and a rich history dating back many thousands
of years.
– Both countries were technologically advanced and were the
richest nations on earth.
– China (25% of world GDP) and India (35% of the world
GDP)
– India was most dominant naval power in the far east even
more powerful than China!
3

4. China’s inland water ways
• Traffic: 850 000 000 t/year
• Facts of importance: Longest water transportation network.
• The Yangtze & Pearl River Delta: has a very important
economic position in China
• Navigable rivers: 110 000 km (Yangtze 6418 km with 3000
km suitable for navigation by vessels).
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Chinese leadership have always been people who
had certifications in Hydrology & River
engineering!

5. • Length:
– More than total navigable length is 14,500 km,
– 5,200 km of the river and
– 4,000 km of canals
• Traffic: About 70,000,000 tons/year
• Navigability: To be optimized
• Facts of importance: Not very popular in the country.
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India’s inland water ways
Only 3% of transportation traffic is presently being handled
by inland waterways.
• India’s logistics cost is highest at 15% to 18%!
• In China the logistics cost is 9%!
• In Europe & USA logistics cost is 11%
Huge opportunity - Reduce Logistics costs

6. PESTEL analysis model
Aim:
Determine the external and internal environments factors affecting
India and China.
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Political factors are basically how the government intervenes in the economy.
Economic factors affect how businesses operate and make
Social factors include the high trends in social factors affect the demand
Technological factors can determine barriers to entry, minimum efficient
production level
Environmental factors include ecological and environmental aspects such as
weather, climate
Legal factors include discrimination law, consumer law, antitrust law, employment
law

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China – PESTEL Model
Political: SEZ, Power generation, low cost mode
Economic: Tax and Tariff, Financial Banking system
Social: Fashion oriented and Impulsive buying behavior
Technological: Huge industry, Close to maritime clusters
Environmental: Increasingly stricter
Legal: Lots of efforts put in place.. Robust system in place

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Political: Competing modes – Rail and road are doing better;
Under developed infrastructure….
Economic: Higher cost of capital, high cost structure, policy
structural framework are on the Anvil…..
Social: Investment of money is happening but some doubts exist
Technological: Work in Progress (WIP), No maritime clusters
nearby
Environmental: Policy frameworks on the ANVIL…
Legal: Lots of efforts put in place..
India – PESTEL Model

9. A new approach is required if India’s is to up its ante and come up with a plan to
leap frog over China:
1. Achieving an 8% GDP growth requires an investment of about 32% of GDP.
2. Under Bharatmala and Sagarmala there are good intentions on the ANVIL….
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Conclusion – PESTEL comparison model
1. China is way ahead in exploitation of waterways
2. China is looking at moving from 47% towards 65% of whole trade being
moved along its rivers
3. China’s initial investments in infrastructure has paid of off handsomely
A clear inter-ministerial vision:
• Connectivity enablers - “Farm to the Fork”.
• Higher purpose vision - shipping + shore industries to “Imagining and visualising
possibilities”!
• Business to Business (B2B)concept → Business to customers (B2B2C)concept!
• Inclusive growth - working at “BASE OF THE PYRAMID”

10. Creating inclusive growth – Development an Inland waterway
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11. Blue Ocean strategy –
Paradigm Change required for the sector??
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Is it time to change our paradigm????
“Thinking loudly”, “Out of the box” & “Unorthodox approach”???
Change from B2B to B2B2C – Will this help???

12. Stakeholder mapping – Farm to Fork
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MNC’s
Farmer’s
Mandi’s
wholesalers
processorTransporters
Micro
financing
institutions

13. Negative impacts of food loss - Social, Environmental and Economic
In India, estimates of food loss range between 10% and 40%.
– Devastating impact on smallholder farmers.
Globally, up to 1.3 billion tons of food is lost or wasted each year
around the world,
In 2007, the total economic cost of food loss and waste was
estimated at US$ 750 billion!!!
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The more profitable a crop - all stakeholders benefit!
Three main levers exist to improve economic efficiency of agricultural value
chains:
- Reduced volatility of supply and prices,
- Increased end-market prices and
- Reduced costs.

14. Drive Demand - Micro economic support for infrastructure creation
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An inter-ministerial team – Matrix team with Ministry of Transport
(Similar to UADAI project) –
• Virtuous cycle of improvement linking
• Helping to connect the dots in food chain
• Business opportunity to do well for the MNC’s.
Demand side can be filled by:
• B2B - contracts between barge/vessel and cargo owners
• B2B2C – MNC’s working in agrichain create demand drivers
• FMCG industry, participate in the food chain by providing incentives.
• Companies like HLL, Godrej, ITC etc.. …..
• Already involved in the “Farm to Fork”.
Inland waterways can create the “SUPPLY side” infrastructure

15. Anti inflation control measure – Floating warehouses
Concept of floating warehouses across inland rivers and
waterways:
• Connecting and “supply” and sources of agricultural
chains with consumption points
• Regular timetabled - barge movements
• Consistent availability of infrastructure - hinterland
connectivity
• Multimodal hubs
• Protection against trucking and railway lobbies creating
hurdles
• Inflation control lever with government
15

16. Base of Pyramid – Inclusive growth with Maritime supply chain
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• Private-sector investments - better logistics, improved
technology and capacity building
• Modernization - MNC’s put on their “Innovation and technology
- thinking cap (find alternative opportunities).
• New lens of inclusive capitalism - MNCs.
• Prospective rewards include growth, profits,
• “Bottom of the Pyramid” lifting billions of people out of poverty
and desperation.
• Creation of micro financing institutions... (key govt initiative)
• Improving communication and trust between stakeholders
• Eliminating bottlenecks in the Value chain – Reduction in food
loss and putting in place “inclusive capitalism”

17. Develop supply chain for individual commodities
Cost Price Index (CPI)/ Wholesale Price Index (WPI)
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Government could look at individual :
• Choose individual on individual commodity chains - WIN-
WIN’s for all stakeholders
• Overt period of time more commodities get addressed..
• The farm losses and Value chain losses go down from 40% to
less than 10%
• Inflation/spike in commodity price – Leashed/reined in!!
• Help connect the dots in the individual commodities supply
chains
• Create jobs for local communities.
• Create and micro financing setups to facilitate small farmers.
• Use “Skill India” to create sustainable jobs for all.

18. Replicating success - implementing lessons learnt
•
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Case Study I: CONCOR - Fresh & Healthy Enterprise Ltd (FHEL)
Earlier
• 30 to 40% of crop wasted – Poor harvest mgmt.
• Associated logistics
• Many Intermediaries in the chain
Now with FHEL
• Cold storage facilities
• Eliminating intermediaries in the Mundi’s.
• Connecting road transport and rail connectivity.
• Provision of nutrients for sowing and growing advisory services
• Marketing and further sales and transport across all demand points in India
and abroad!!
Government agencies -serious enablers →Trade and Demand creation
Connect production points with national and international demand points

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Case Study II: GINFED
Earlier
• Lack of economies of scale.
• Transportation and Associated logistics
• Many Intermediaries in the chain
• Distress sale due to lack of marketing channel
• Lack of micro finances
Now with GINFED (Fair prices for farmers)
• Provisions Cold storage facilities
• Eliminating intermediaries in the Mundi’s.
• Reduced transportation cost & Connecting road transport and rail connectivity.
• Provision of nutrients and Sowing and growing advisory services
• Marketing and further sales and transport across all demand points in India and
abroad!!
Replicating success - implementing lessons learnt

20. Coastal shipping – Value creation
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Real estate and land availability ashore is very expensive:
• Govt - Set of floating Mundi’s in offshore waters
• Reduce the loss - the rodent menace
• Private and government backed storages/ warehouses
• MNC’s could be used to participate in warehousing for various
industry segments.
• Buffer against inflation – Hedge against shortages
• Multimodal hubs
Slowly, but surely, India’s congested highways are pushing
companies to opt for coastal shipping to transport commodities!

21. Areas needing government attention
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Regulatory
• A comprehensive National Policy/Act on Coastal Shipping
• Broadcasting provision of Cabotage
• Flexibility to access international insurance markets
Fiscal
• Adoption of tonnage tax regime
• Enhanced depreciation rates
Allied
• Industry status to Coastal Shipping
• Dedicated berths at ports for coastal vessels
• Simplification of customs procedures
• Rationalization of Sales/Lease/Service tax
Imperative Action Sought!
• Need for Government to take a pragmatic approach to issues pertaining to coastal
shipping
• Outline a policy framework - Create level playing conditions.

22. Summary
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There is huge opportunity to turbocharge India’s economy in the coming
years.
• Industry stakeholders need to join hands with government to vitalize the inland
waterways and coastal shipping.
• Author is sure that the government will look at this opportunity as “Farm to Fork”.
• Structural and infrastructural changes are required to be put in place in steady and
fast pace.
• This will create the “Buzz” around coastal shipping, inland waterways’ and create
opportunities for MNC’s to participate in the Value chain.
• This will help India catch up with China by 2035 at the latest!
• A grand vision to leapfrog over China will revitalize the Indian maritime sector!

23. Disclaimer & Bibliography
The views on the subject matter are purely the personal views of the
author and do not in any way reflect any organizations view on the
subject matter
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Bibliography:
• Comparative Analysis of Maritime Infrastructures
• PINE – Prospects for Inland Navigation in Enlarged Europe
• Bains Report – Enabling Farm to Fork
• The Fortune at the Bottom of the Pyramid - CK Prahalad
• Michael Porter’s Five Forces Analysis in Shipping Industry - Bangladesh
• Trade and shipping agreements
• Efficient Hinterland Transportation
• The Worth and the Significance of Port in Economic Integration Development Model: A Case Study on
Yangtze River Economic Belt China
• Viability of Inland Water in India - Rangarajan and Raghuram
• Port sector and outlook
• Water Resources Development models - Myanmar study 2014dec
• Inland Waterborne Transport - Connecting countries
• IBEF - Ports-June-2017
• Meet the 2020 Chinese Consumer - McKinsey Consumer & Shopper Insights 2012
• INDIAN COASTAL CONFERENCE – GESCO presentation - 15 December

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