FCC

Indian container cargo set to expand by 8% in FY25 amidst Red Sea crisis

2024-05-17

CareEdge Ratings forecasts that Indian container cargo volume will experience an 8% growth, reaching 342 million tonnes (mt) in FY25. They also anticipate the risk of a prolonged Red Sea crisis. In a sectoral report, the agency mentions that the connection of the Dedicated Freight Corridor to Jawaharlal Nehru Port Trust (JNPT) in FY26, coupled with capacity expansions by ports, will likely propel the growth in container volumes in the medium term. According to the report, significant adverse movements in charter rates affecting cargo volumes, as well as vessel additions by shipping lines, will be important factors to monitor.

Regarding coal cargo throughput, the agency predicts a Compound Annual Growth Rate (CAGR) of 3-4% from FY24 to FY26. Despite expectations of a 2-3% decrease in coal imports due to increased domestic coal production, they believe that coal cargo throughput at ports will still increase. The report suggests that the share of coastal cargo is projected to climb from 33% in FY24 to 42% by FY26. Maulesh Desai, director at CareEdge Ratings, explains that this growth will mainly result from the coastal movement of coal along the eastern coast, complemented by additional capacities and synergistic benefits. Furthermore, the government's emphasis on developing infrastructure for sectors like steel and cement, along with enhancing multimodal connectivity under the Maritime Amrit Kal 2047 vision, also supports the anticipated rise in coastal movements at ports.