Adani Vizhinjam Seaport: A Key Strategic Asset For India’s Maritime Future

Adani Ports has signed a supplementary agreement with the Kerala government to enhance the Vizhinjam Seaport project. The first phase of the project is expected to begin operations next month, while the second and third phases are planned for completion by 2028. The port's capacity will expand to 30 lakh twenty-foot equivalent units with an additional investment of Rs 10,000 crore.

The total project cost is Rs 8,867 crore, with the Kerala government contributing Rs 5,595 crore, according to Kerala Port Minister VN Vasavan.

"By 2028-29, when all four phases of this project are completed, the Kerala government and Adani Vizhinjam Port will have invested a total of Rs 20,000 crore in this outstanding example of a large-scale PPP project," Karan Adani had said in July.

A transshipment port serves as an intermediate point where cargo is moved between ships during its journey to the final destination. This process often involves moving smaller cargo onto larger vessels, referred to as mother ships, to reduce shipping costs and transit times. Since not all ports are directly connected, transshipment ports are crucial for global trade.

Transshipment becomes necessary when the port at either the origin or destination lacks the capacity to handle large vessels. In these instances, smaller ships transport cargo to or from transshipment ports, where it is loaded onto or offloaded from larger vessels. This need has led to the development of transshipment ports in India. Major transshipment ports around the world include Singapore, Shanghai, Shenzhen, Busan, and Hong Kong.

The Vizhinjam Port is strategically situated between the Suez Canal and the Strait of Malacca, placing India along key global trade routes. Transshipment is required when either the origin or destination port cannot handle large ships. The Indian government’s Maritime India Vision 2030 aims to develop world-class mega ports, transshipment hubs, and modern infrastructure. The port is expected to lower shipping costs, enhance cargo capacity, and support India’s manufacturing goals by providing a viable alternative to China.

Located near the southern tip of India, the port offers access to major international shipping routes, helping India expand its share of global maritime trade. About 30% of global cargo traffic passes through nearby routes, according to a Bloomberg report. The port's natural depth of up to 24 meters makes it ideal for the world’s largest container ships, which have traditionally bypassed India due to shallow harbours. These ships currently dock at nearby ports such as Colombo, Dubai, Singapore, and Malaysia.

Currently, 75% of India’s transshipped cargo is handled outside the country, with Colombo, the Bloomberg news report said.