Sittwe port in May last year (Photo: PIB)
S Venkat Narayan – Special to Mizzima
NEW DELHI, April 9: After Chabahar in Iran, India has gained the rights to operate a second overseas port, Sittwe, in Myanmar. The Ministry of External Affairs (MEA) has approved a proposal for India Ports Global (IPGL) to take over the operations of the entire port located on the Kaladan River.
IPGL is a company 100 per cent owned by the Ministry of Ports, Shipping and Waterways.
In the Indian Ocean, China and India are engaged in a struggle to expand their economic influence. Ports have become highly significant in this rivalry. China, in particular, has been aggressively seeking to acquire operating rights for numerous ports in different countries in the region, such as Hambantota in Sri Lanka and Djibouti in Africa. It has also approached Maldives and Bangladesh to invest in their ports, all of which raise serious concerns for India.
Sittwe began receiving cargo from India in May last year. The first consignment of cargo sailed from Syama Prasad Mookerjee Port in Kolkata to the port in Myanmar’s sensitive Rakhine state and was received by Minister for Ports, Shipping and Waterways Sarbananda Sonowal and his Myanmar counterpart Admiral Tin Aung San.
The port offers a significant connectivity advantage for cargo to reach from Vizag in Andhra Pradesh and Kolkata in West Bengal to the Northeastern states, bypassing Bangladesh.
The MEA approval means the port will now become an India-operated entity. On the financial front, it is expected that IPGL will encourage transactions in the Indian rupee among traders using the port.
IPGL will operate the port with full rights, similar to any other Indian domestic port. The Sittwe deal is more significant than Chabahar, where IPGL has rights to operate only two terminals and not the port itself.
The Sittwe deal is a long-term one, to be renewed every three years.
Under the agreement, IPGL will raise finance to develop the port, which was initially built with a $500-million grant-in-aid from India. Situated on the Kaladan River delta, the port has the potential to accommodate deepwater sea vessels.
Current trade volumes between India and Myanmar are limited to construction materials such as cement, steel, and bricks from India, while imports from Myanmar include rice, timber, fish, and seafood. These could now shift to higher value-added products as the port expands.
The Indian states poised to benefit immediately are Mizoram and Tripura. Presently, Indian cargoes travelling to these destinations have to pass through Bangladesh, mainly the Chittagong port.
This scenario could change soon.
“The development of Sittwe port required a dedicated user agency, which has not been possible so far. IPGL will fill that vacuum with long-term planning,” said a senior official of the Ministry of Ports, Shipping and Waterways.
This port is part of the Kaladan Multimodal Transit Transport Project. Once operationalised, the Sittwe port will enable multimodal transit connectivity with Southeast Asia.
Sittwe Port has been developed under a framework agreement between India and Myanmar for the construction and operation of a Multimodal Transit Transport Facility on the Kaladan River, connecting the Sittwe Port in Myanmar with the state of Mizoram in India.
The approval is also significant for IPGL in other respects, the official said. It clarifies that this company will now spearhead India’s overseas port development initiatives. Tanzania, for instance, has requested India’s support to develop the potential of its ports.
