APM Terminals seals $1bn ports deal in India

APM Terminals, the port operating subsidiary of Maersk, has entered into a significant partnership with the Andhra Pradesh Maritime Board, committing to invest ₹9,000 crore (approximately $1.1 billion) in the enhancement of three major ports in Andhra Pradesh. The memorandum of understanding, signed in the presence of Chief Minister N. Chandrababu Naidu, aims to modernize the Ramayapatnam, Machilipatnam, and Mulapeta ports, along with their supporting infrastructure. This initiative is expected to create around 10,000 direct jobs and position Andhra Pradesh as a key player in India’s maritime trade.

Transforming Andhra Pradesh into a Maritime Hub

The agreement outlines a comprehensive plan for upgrading the three ports, which includes the introduction of advanced cargo handling systems and the development of new terminals. APM Terminals will oversee the operations, ensuring that the ports meet modern standards. Chief Minister Naidu emphasized the importance of this partnership, stating it marks a pivotal move towards establishing Andhra Pradesh as the “eastern gateway” for India’s maritime trade and a logistics hub for the region.

To enhance connectivity, Naidu instructed APM Terminals to devise a detailed logistics strategy that integrates the ports with road, rail, inland waterways, and air transport networks. This initiative aims to lower transportation costs and improve overall accessibility. Furthermore, the Chief Minister reiterated the state’s ambitious plan to establish a port or harbor every 50 kilometers along its extensive 1,053-kilometer coastline, which is expected to bolster trade flows significantly.

The memorandum not only reflects Andhra Pradesh’s aspirations to capitalize on its lengthy coastline but also highlights Maersk’s increasing interest in the Indian market. APM Terminals‘ Chief Executive Keith Svendsen has previously indicated that the company envisions a $5 billion investment pipeline in ports, terminals, and related infrastructure as part of a long-term collaboration with India.

AP intends to build a logistics hub and coastal highway in Tarluwada

Broader Implications for India’s Maritime Sector

This investment comes on the heels of another memorandum signed by Maersk with Cochin Shipyard earlier this year, aimed at exploring opportunities in ship repair and shipbuilding. The first Maersk vessel is anticipated to undergo repairs at the shipyard in 2025. This aligns with India’s strategic goal of becoming one of the world’s top 10 maritime nations by 2030 and breaking into the top five by 2047.

India’s maritime sector is attracting attention from global shipping giants, with MSC, the world’s largest container shipping operator, also exploring various opportunities within the country. These include investments in container terminals, shipbuilding, maintenance, and container manufacturing, alongside policy reforms designed to enhance competitiveness in the maritime industry.