Maersk: Indian reforms put trade on path for growth

Maersk: Indian reforms put trade on path for growth

Trade with Mediterranean ports such as Algeciras showed particularly strong growth. Photo credit: Maersk Line.

Maersk Line is placing high hopes on India as the effects of reform-related supply chain disruptions eased and growth accelerated after a tepid first half in the emerging Asian economy.

The transportation behemoth in its latest market analysis said India had a 10 percent increase in containerized export-import trade during the third quarter year-over-year, and that trend would gain further momentum in the coming months once shipper concerns over refunds under the new tax regime – the Goods and Services Tax (GST) – are addressed.

While those upticks are expected to increase consumer spending, recent government announcements granting infrastructure status to the logistics sector and unveiling plans to establish a special group to promote Indian exports could provide a further lift to the economy, according to the report.

“The growth we have seen this quarter reflects the resilience of India’s global trade environment. Not only is India repeatedly outpacing the global growth average, but it is also one of the strongest global import-export partners amongst the BRICS [Brazil, Russia, India, China and South Africa] nations,” Maersk Line India Subcontinent Managing Director Steve Felder told

The report said as India’s ease-of-doing-business competitiveness steadily improves, with a giant leap of 30 spots to 100 in the World Bank’s global rankings, the Maersk Group is positioning itself to support that expected growth, with upgraded end-to-end logistics offerings, especially for reefer cargo, and customer services improvements. To that effect, its group subsidiary APM Terminals Inland Services last month opened a new 12-acre inland container depot (ICD) in Pune, about 150 kilometers (93 miles) from Mumbai, bringing the number of its logistics sites in the country to seven.

“We are committed to continuing to invest in further enhancing our capabilities in this area,” Felder said.

Maersk, which transports roughly 20 percent of India’s total containerized cargo, said India’s third-quarter performance largely benefited from accelerated exports to the Mediterranean and North America, which increased by 14 percent and 8 percent year over year, on the back of New Delhi’s closer trade ties with those regions.

Of the Mediterranean nations, Turkey was one of the major importers of textiles from northern India as well as vehicles and metal products from western India, whereas Indian shipments to Algeria had an 28 percent jump in the July-to-September period. Demand for Indian household goods such as kitchenware from the Persian Gulf also spiked significantly in the third quarter, with those shipments to the United Arab Emirates climbing 38 percent and Saudi Arabia rising 8 percent.

“One of the key success factors to India’s global trade growth is that India has successfully forged trade relationships with multiple geographies and in multiple commodities," the report said. "By doing this, we have not only ventured into newer markets, but have also balanced out the opportunities and challenges that come to us in the form of peaks and troughs each geography witnesses as a result of its own local dynamics.”

The third-quarter analysis also showed India had an overall 8 percent year-over-year increase in imports, with those volumes to north India and south India growing 13 percent and 11 percent, respectively. Those improvements mainly came from increased Indian demand for Chinese white goods, waste paper from the United States, plastics and rubber articles from Saudi Arabia, and automobile parts and vehicles from Germany.  However, third-quarter imports to eastern India slipped 3 percent year over year, according to the analysis.

Other highlights of the third-quarter report include growing Indian reefer imports. Those from from the Mediterranean increased 49 percent increase while those from the United States rose 14 percent. The report also revealed changing Indian paper sourcing patterns, with importers shifting from South Korea to the United States and Saudi Arabia in the wake of escalating tensions on the Korean peninsula.

The Danish carrier believes that India’s burgeoning middle class combined with rapid industrialization efforts would augur well for the country’s containerized import trade.

Maersk also expects Indian export-import trade growth to remain steady this year and possibly accelerate further next year, particularly if various projects under the Sagar Mala program and dedicated freight corridors are completed expeditiously.

A port statistics analysis shows April-to-November container throughput at India’s major ports was up 6.3 percent to 6 million TEU from 5.6 million TEU in the same period last year.  November volume rose 5.6 percent to 741,000 TEU from 702,000 TEU a year earlier.