What are your thoughts on the key global factors that will influence trade and shipping in 2025 and beyond?
Several global factors are set to shape the future of trade and shipping. First, geopolitical developments, such as changes in US trade policies under new leadership, can significantly impact global trade volumes.
For instance, tariff wars have already led to preloading and surges in volumes, and there’s apprehension about potential escalations.
While some see these actions as negotiating tools, uncertainty remains. Second, the ongoing geopolitical tensions, especially in regions like the Red Sea, present major challenges. These tensions affect shipping routes, freight costs, and the demand-supply scenario.
Social, and Governance (ESG) standards are at the forefront, with alternative fuels like LNG, methanol, and ammonia being explored.
However, the adoption of these fuels poses challenges, including investment needs and confidence in new technologies. Shipowners must make cautious decisions, balancing compliance with operational efficiency.
With these global trends in mind, what changes do you foresee in India’s container trade by 2025?
India’s container trade is poised for steady growth, albeit not at double-digit rates. Over the next few years, we expect annual growth of 6-7 per cent, tapering to around 5 per cent by 2027-2028. South Asia, led by India, will remain one of the strongest regions, with a robust outlook supported by economic activities in India and neighbouring countries like Sri Lanka and Bangladesh. However, India’s trade dynamics present challenges. Import growth has outpaced exports, increasing trade deficits.
While initiatives like “Make in India” and China Plus One offer opportunities, their potential are yet to be fully realized. For sustainable growth, India must focus on boosting manufacturing and export capabilities. This is essential not just for trade volumes but also for job creation and economic resilience.
Where do you see the most prudent investments in India’s logistics sector?
Infrastructure development will lead the way, with government initiatives playing a pivotal role. While Port capacities are expanding organically, the focus should shift to land-side infrastructure, including Inland Container Depots (ICDs), Container Freight Stations (CFS), and warehouses. These are critical for reducing bottlenecks and improving cargo movement.
Investments in projects like the Dedicated Freight Corridor (DFC) are crucial but have faced delays. Completing such projects will significantly enhance logistics efficiency. Additionally, coastal and inland waterways hold long-term potential, helping decongest roads and providing sustainable connectivity. While these require substantial investment and face challenges, these are essential for the sector’s evolution.
How do you view the prospects of India’s shipbuilding and repair industry?
India’s shipbuilding and repair sector has immense potential but faces structural challenges. The industry lacks a comprehensive ecosystem, including local manufacturing of key components like engines.
Import dependence and associated costs erode competitiveness. To unlock this sector’s potential, significant government support, policy interventions, and investment in labour training are necessary. Developing a skilled workforce and addressing infrastructure gaps will be key to building a sustainable shipbuilding ecosystem.
Freight rates have been a topic of debate. Some predict a crash, while others expect stability. What is your perspective?
Freight rates are unlikely to crash but may face softening pressures. Container shipping lines have learned to manage supply effectively through measures like slow steaming and selective scrapping of older vessels.
While global trade growth is modest, it remains positive, which supports demand. However, supply-side pressures from new vessel deliveries and geopolitical factors, such as disruptions in the Red Sea, could create volatility. Shipping lines’ ability to adapt to these dynamics will determine rate stability. We might see short-term spikes followed by stabilization.
What are the emerging opportunities in India’s logistics sector, and how can they be leveraged?
India’s logistics sector offers significant opportunities, particularly in infrastructure development and digital transformation. Key areas include:
Inland Connectivity: Improving road and rail networks, alongside the DFC, will enhance cargo movement and reduce logistics costs.
Coastal and Inland Waterways: Investments in waterways can provide sustainable connectivity and support regional economic development.
Digitalization: Leveraging technology for seamless cargo tracking, documentation, and payment processes will drive efficiency and customer satisfaction.
Export Growth: Strengthening manufacturing and export capabilities through targeted policies and incentives can create new trade opportunities.
How should India address the challenges posed by global trade shifts and geopolitical dynamics?
India stands to benefit from the “China Plus One” strategy, but achieving competitiveness will require focused efforts. Key priorities should be:
• Infrastructure Development: Expanding Ports, improving inland connectivity, and streamlining regulatory processes.
• Quality and Scale: Enhancing manufacturing efficiency and ensuring consistent quality to compete globally.
• Investment Attraction: Creating a conducive environment for foreign investments through policy stability and incentives.
While progress is evident, sustained efforts are needed to fully capitalize on emerging opportunities.
Finally, how do you see the logistics sector evolving in the next decade?
The logistics sector is on the cusp of transformation. Digitalization, sustainability, and infrastructure development will be the cornerstones of growth.
Companies that embrace these changes and align with global trends will thrive.
For India, leveraging geopolitical shifts, investing in sustainable practices, and fostering innovation will be critical. The sector’s evolution will not only support economic growth but also enhance global trade competitiveness. The next decade will be pivotal in defining the logistics industry’s trajectory, both in India and globally.
