Infrastructure

Context: Battery electric vehicles are at the heart of the government’s push for net zero. However, this strategy may not be as successful in India’s peculiar conditions. While there is little debate that electrification is the future, the roadmap remains unclear.

What are Electric Vehicles(EVs)?

An EV is defined as a vehicle that can be powered by an electric motor that draws electricity from a battery. There are four types of electric vehicles available:

• Battery Electric Vehicles (BEVs): They are also known as All-Electric Vehicles (AEV). Electric Vehicles using BEV technology run entirely on a battery-powered electric drivetrain. The electricity used to drive the vehicle is stored in a large battery pack which can be charged by plugging into the electricity grid. The charged battery pack then provides power to one or more electric motors to run the electric car.
• Hybrid Electric Vehicle (HEVs): They combine a conventional internal combustion engine (ICE) with an electric propulsion system, resulting in a hybrid drivetrain that substantially lowers fuel usage. The onboard battery in a conventional hybrid is charged when the internal combustion engine is powering the drivetrain. 
• Plug-in Hybrid Electric Vehicle (PHEVs):  They also have hybrid drivetrain that uses both an ICE and electric power for motive power, backed by rechargeable batteries that can be plugged into a power source.
• Fuel Cell Vehicles (FCVs): These vehicles use hydrogen to power their onboard electric motor. FCVs combine hydrogen and oxygen to produce electricity, which runs the motor. Unlike BEVs, their range and refuelling process are comparable to conventional cars.

Issues with Battery Electric Vehicles (BEVs) Push

• Requirement of Upfront Subsidy: Push for such vehicles require an elaborate system of lucrative tax incentives which must be backed by government subsidies. However, this overt subsidisation will further intensify the state's fiscal burden. 
• Charging Network: India currently has only about 2,000 public charging stations operational across the country to support more than 1 million EVs. Also, due to varied power requirements for differently sized vehicles, India’s charging infrastructure demands are unique. This has further created challenges in charging infrastructure expansion.
• Electricity Source: In India, the grid is still fed largely by coal-fired thermal plants. Using fossil fuel generation to power EVs would mean reduced tailpipe emissions in the cities, but continuing pollution from the running of the thermal plant.
• Value Chain: India is struggling to make inroads into the global value chain for sourcing of key inputs such as Lithium, Cobalt and Nickel. This will make India almost entirely reliant on imports from a small pool of countries such as Argentina, Chile, China and Australia in order to meet the increasing demand.

Way Forward

The two major objectives should be to cut emissions and reduce costly fuel imports for which there are a lot of technologies to choose from:

• Hybrids: The hybrid technology is seen as a good intermediate step towards achieving the all-electric goal. Hybrids typically have improved fuel efficiency through electrification of the powertrain, but do not require the charging infrastructure base that is an essential for BEVs. Additionally, a hybrid vehicle base may also spawn the manufacture of the battery ecosystem, which can then be leveraged for a BEV push.
• Ethanol & Flex Fuel: A flex fuel, or flexible fuel, vehicle has an internal combustion engine, but unlike a regular petrol or diesel vehicle, it can run on more than one type of fuel, or even a mixture of fuels such as petrol and ethanol. A nationwide pilot that is currently underway aims to replicate the commercial deployment of this technology in other markets such as Brazil, Canada, and the US.
• FCEVs & Hydrogen ICEs: Hydrogen fuel cell electric vehicles (FCEVs) are practically zero emission, while Hydrogen ICE vehicles are similar to conventional internal combustion engine vehicles, with a few tweaks to prep them to run on hydrogen. Certain components of the engine can be modified or changed which will make them compatible with hydrogen, instead of petrol or diesel. 
• Synthetic Fuels: These fuels are made from carbon dioxide and hydrogen, and are produced using renewable energy. The idea is to make this usable in all petrol-engine cars, rendering their use virtually CO2-neutral, and thereby give ICE cars a fresh lease of life. 

ConclusionIt must be noted that monetary incentives alone cannot drive EV penetration. Hence, the government must invest in robust EV infrastructure, parking benefits and workplace charging facilities. Further, vehicle manufacturers must maintain a technology-agnostic approach that spells out the emissions objectives that they have to meet, irrespective of technology.

Context: The proposed ‘Digital India Bill’ holds out the promise of not only upgrading the current legal regime but also redefining the contours of how technology is regulated.

Proposed Digital India Bill

• The Ministry of Electronics and IT (MeiTY) is organising consultations on the proposed “Digital India Bill” in order to replace the 23-year-old Information Technology (IT) Act. 
• Objective: To upgrade the current legal regime to tackle emerging challenges such as user harm, competition and misinformation in the digital space.
• Proposed Changes: Include categorisation of digital intermediaries into distinct classes such as e-commerce players, social media companies, and search engines to place different responsibilities and liabilities on each kind.

Present Regime

• The current IT Act defines an “intermediary” to include any entity between a user and the Internet, and the IT Rules sub-classify intermediaries into three main categories:
  • Social Media Intermediaries (SMIs): SMIs are platforms that facilitate communication and sharing of information between users.
  • Significant Social Media Intermediaries (SSMIs): SMIs that have a very large user base (above a specified threshold) are designated as SSMIs.
  • Online Gaming Intermediaries

Challenges

• Broad Definition: The definition of SMIs is so broad that it can encompass a variety of services such as video communications, matrimonial websites, email and even online comment sections on websites. 
• Stringent Obligation: The IT rules also lay down stringent obligations for most intermediaries, such as a 72-hour timeline for responding to law enforcement requests and resolving ‘content take down’ requests. 
• Similar Treatment for Different Platforms: Licensed intermediaries with a closed user base and presenting a lower risk of harm from information going viral are treated at par with conventional social media platforms. This adds to their cost of doing business and also exposes them to greater liability without meaningfully reducing risks presented by the Internet.

Global Examples

• The European Union’s Digital Services Act is one of the most developed frameworks. It introduces some exemptions and creates three tiers of intermediaries — hosting services, online platforms and “very large online platforms”, with increasing legal obligations. 
• Australia has created an eight-fold classification system, with separate industry-drafted codes governing categories such as social media platforms and search engines. Intermediaries are required to conduct risk assessments, based on the potential for exposure to harmful content such as child sexual abuse material (CSAM) or terrorism.

Way Forward

• Moving beyond product-specific classification: While a granular, product-specific classification could improve accountability and safety online, such an approach may not be future-proof. As technology evolves, the specific categories we define today may not work in the future. 
• Fewer Categories: There is a need for a classification framework that creates a few defined categories, requires intermediaries to undertake risk assessments and uses that information to bucket them into relevant categories. 
• Minimising Obligations on Smaller Intermediaries: As far as possible, the goal should also be to minimise obligations on intermediaries and ensure that regulatory demands are proportionate to ability and size.
  • Micro and small enterprises, and caching and conduit services (the ‘pipes’ of the Internet) can be exempted from any major obligations
  • Further, there is a need to clearly distinguish communication services (where end-users interact with each other) from other forms of intermediaries (such as search engines and online-marketplaces). 
  • Given the lower risks, the obligations placed on intermediaries that are not communication services should be lesser. However, they could still be required to appoint a grievance officer, cooperate with law enforcement, identify advertising, and take down problematic content within reasonable timelines.
• Special Obligation on Intermediaries Offering Communication Services: 
  • They could be asked to undertake risk assessments based on the number of their active users, risk of harm and potential for virality of harmful content. 
  • Further, the largest communication services (platforms such as Twitter) could then be required to adhere to special obligations such as appointing India-based officers and setting up in-house grievance appellate mechanisms with independent external stakeholders to increase confidence in the grievance process. 
  • Alternative approaches to curbing virality, such as circuit breakers to slow down content, could also be considered.

Conclusion

For the proposed approach to be effective, metrics for risk assessment and appropriate thresholds would have to be defined and reviewed on a periodic basis in consultation with industry. Overall, such a framework could help establish accountability and online safety, while reducing legal obligations for a large number of intermediaries. In doing so, it could help create a regulatory environment that helps achieve the government’s policy goal of creating a safer Internet ecosystem, while also allowing businesses to thrive.

Context: Central Board of Indirect Taxes & Customs (CBIC) has released National Time Release Survey 2023 report. The National Time Release Study 2023 will establish baseline performance against National Trade Facilitation Action Plan Target 2020-2023 to reduce the overall cargo release time.

About Time Release Survey

• Time Release Study (TRS) is a performance measurement tool that aims to present quantitative measure of the cargo release time, defined as the time taken from arrival of the cargo at the Customs station to its out of charge for domestic clearance in case of imports and arrival of cargo at the Customs station to the eventual departure of the carrier in case of exports. Thus, it measures efficiency of trade flows. 
• Import Release Time: Arithmetic mean of the period between 'arrival of goods' & customs' granting of 'out of charge'.
• Export Release Time: Arithmetic mean of the time between cargo's arrival at the port & its physical departure from port/customs station. 
• It will help identify existing procedural bottlenecks impacting trade of goods & will recommend corresponding policy & procedural changes.

National Time Release Survey 2023

• NTRS 2023 presents port-category wise average release time for the current year, based on sample period of January 1-7, 2023, comparing the same to the average release time during the corresponding periods 2021 and 2022:
  • Assess progress made towards National Trade Facilitation Action Plan targets.
  • Identify impact of various trade facilitative measures, particularly 'Path to Promptness'.
  • Identify challenges to more expeditious reduction in release time.
• Ports included: Seaports, Air cargo complexes (ACCs), Inland Container Depot (ICDs) and Integrated Check Posts (ICPs) accounting for 80% of bills of entry & 70% of shipping bills (approx) filed in the country.
• NTRS 2023 has placed much greater focus on measurement of export release time by making a distinction between regulatory clearance, which gets completed with grant of Let Export Order (LEO) and physical clearance which occurs on completion of logistics processes with departure of carrier with the goods. 

Findings of NTRS 2023

• Average import release time has improved by reduction of time by 20% for ICDs, 11% for ACCs & 9% reduction for seaports in 2023 over 2022. The measure of standard deviation is found to be lower, indicating a greater certainty of expeditious release of imported cargo.
• Adopting the benchmark of regulatory clearance, NTFAP release time target has been achieved for all port categories. Extent of certainty regarding the bettered average release time has improved.

Reasons for the improvement of release times

Improved release time is the result of efforts of various stakeholders including Customs, Port Authorities, Customs Brokers & Participating Government Agencies in implementing various trade facilitation. 

Context: The recently released World Bank’s Logistic Performance Index (LPI) Report 2023 has brought encouraging news for Indian ports as well as for the country’s logistics sector. India has moved up to 22nd rank in the global rankings on the “International Shipments” category from the 44th position in 2014. Moreover, the country has also secured the 38th rank on the LPI score.

About India’s Port

• Ports are an essential part of the maritime environment and are like hubs that link sea routes with trade routes on land.
• There are 12 major ports and 200 non-major ports (minor ports) in the country. While the Major Ports are under the administrative control of the Ministry of Shipping, the non-major ports are under the jurisdiction of respective State Maritime Boards/ State Governments.
• All the 12 Major ports are functional. Out of the 200 non-major ports, around 65 ports are handling cargo and the others are “Port Limits” where no cargo is handled, these are used by fishing vessels and by small ferries to carry passengers across the creeks, etc.
• All the 12 Major Ports are governed under the Major Port Authorities Act, 2021.
• All the Non-Major Ports (minor ports) are governed under the Indian Ports Act of 1908 and regulates the berths, stations, anchoring, fastening, mooring, and unmooring of vessels.

• Major ports are included in the Indian Constitution's Union list.
• The Government of India appoints a Board of Trustees to oversee each major port. Their responsibilities include port development, management, and operations.
• India’s key ports had a capacity of 1,598 million tonnes per annum (MTPA) in FY22. 
• In FY22, major ports in India handled 720.29 million tonnes of cargo traffic, implying a Compounded annual growth rate  of 2.89% in FY16-22. 
• Non-major ports accounted for 45% of the total cargo traffic at Indian ports in FY22, due to a significant shift of traffic from the major ports to the non-major ports.

Significance of ports infrastructure

• Facilitating International Trade: Ports serve as vital gateways for international trade, enabling the movement of goods and commodities between countries. India’s major and minor ports handle about 95% of India’s international trade.
• Economic Impact: Ports create numerous economic opportunities, generating employment and attracting investments. The Government of India has allowed Foreign Direct Investment (FDI) of up to 100% under the automatic route for projects related to the construction and maintenance of ports and harbours
• Supply Chain Efficiency: It acts as critical node in global supply chains. They connect different modes of transportation and facilitate the smooth flow of goods from production centers to consumers.
• Trade Competitiveness: Well-developed ports enhance a country's competitiveness in global markets.
• Revenue Generation: It is a significant source of revenue for governments through tariffs, customs duties, and other fees levied on cargo handling and related services.
• Connectivity and Regional Integration: They facilitate trade between neighbouring countries, promote cross-border cooperation, and support the development of economic zones and industrial clusters.
• Environmental Considerations: Ports are increasingly focusing on sustainable practices and reducing their environmental impact. The focus on decarbonisation in the maritime sector along with the Panchamrit commitments of the government has been reflected in the port sector: There has been a 14-fold increase in the use of renewable energy in major ports over the last eight years. Four of the major ports now generate more renewable energy than their total energy needs.

Challenges in India’s port connectivity

• Prolonged ship turnaround times: India's ports experience lengthy ship turnaround times. For instance, the normal ship turnaround time at Singapore is under a day. However, it takes more than two days in India.
• Port Congestion: The number of containers, the lack of equipment for managing them, and ineffective operations all contribute to port congestion, which is a major problem. Consider the port of Nhava Sheva as an illustration.
• Sub-optimal Transport Modal Mix: This is due to a lack of the infrastructure required for evacuation from both large and minor ports.
• Protracted inspections and scrutiny: Despite India’s customs processes rapidly moving towards paperlessness and digitisation, cargo and other maritime activities are nevertheless the subject of protracted inspections and scrutiny.
• Issues with technology and inadequate infrastructure are present in non-major ports, where there aren't enough berths or ones that are long enough for vessels to berth properly.
• Different administrations are in charge of major and minor ports. The regulatory framework is also rigid.
• Spills or leaks from cargo loading and unloading and pollution from oil spills are widespread during port operations due to a lack of respect for environmental rules and standards.
• The majority of port development and initiatives result in the displacement of people for example Mundra in Gujarat and Gangavaram Port in Andhra.
• Dredging: Some Indian ports particularly those on the east coast and near the Gulf of Mannar are prone to excessive siltation which reduces their capacity.

Government Initiatives

• The Harit Sagar Green Port guidelines: It aims to bring about a paradigm shift towards safe, efficient, and sustainable ports while implementing sound environmental practices among all stakeholders.
• National Logistics Portal (Marine): It is a single-window digital platform for all stakeholders including those engaged in cargo services, carrier services, banking and financial services, and government and regulatory agencies. 
• Sagar Setu app: It facilitates seamless movement of goods and services in ports while substantially enhancing the ease of doing business.
• Major Port Authorities Act, 2021 which grants greater autonomy to major ports. 
• Marine Aids to Navigation Act, 2021 that provides for increased safety and efficiency in vessel traffic services and training and certification at par with international standards.
• The Indian Vessels Act, 2021 which brings uniformity in law and standardised provisions across all inland waterways in the country. 
• Maritime India Vision, 2030: It has identified initiatives such as developing world-class Mega Ports, transhipment hubs and infrastructure modernization of ports
• Sagarmala Project: To promote port-led development in the country through harnessing India’s 7,500 km long coastline, 14,500 km of potentially navigable waterways and strategic location on key international maritime trade routes. The main vision of the is to reduce logistics cost

Way Forward

• With the increasing participation of the private sector in the port sector,the share of minor ports has been increasing for example Mundra port is highest in terms of number of containers in handled annually. In this respect suitable policy changes is needed to Indian Ports Act of 1908 with present-day requirements.
• Providers of services such as operation and maintenance, pilotage and harboring and marine assets such as barges and dredgers are benefiting from these investments.
• Expansion and Modernisation by increasing the capacity of ports to handle larger volumes of cargo, improving berthing facilities, and upgrading storage and handling capabilities. The use of advanced technologies such as automated cranes, robotic systems, and smart port management systems should be explored to optimize operations and improve efficiency.

• Careful planning should be undertaken to ensure adequate connectivity with road and rail networks to facilitate seamless movement of goods.
• Coastal Economic Zones (CEZs) provide a conducive business environment, streamlined regulatory processes, and infrastructure support, which can attract manufacturing units, logistics companies, and other industries to set up operations near ports.
• Efforts should be made to improve connectivity between ports and the hinterland through efficient road and rail networks.
• India should continue its digital transformation efforts in the port sector. Implementing technologies such as blockchain, Internet of Things (IoT), and data analytics can enhance transparency, efficiency, and security in port operations. Automation of processes, such as electronic documentation, container tracking, and cargo clearance, can help reduce paperwork, delays, and human errors.

Simplifying and streamlining regulatory processes, permits, and clearances related to port infrastructure development can attract investments and expedite project implementation. An efficient regulatory framework can provide certainty to investors and promote ease of doing business in the port sector.

Read also: List of Major important ports in India