On May 16, 2014—the day Narendra Modi was elected as India’s new prime minister—Adani Ports and Special Economic Zone acquired Dhamra port, a joint venture between the Tata group and Larsen & Toubro, for Rs5,500 crore ($930 million) and stepped up its play on the east coast.The company—controlled by India’s eighth richest man Gautam Adani—already operates India’s biggest private port on the west coast at Mundra in Gujarat.Now, Adani is reportedly making plans to buy Essar Ports—India’s second biggest port operator—which will make it the biggest port operator in India after the union government.

Adani’s big play in ports also comes at a time when India’s port and shipyard sector is witnessing a renewed interest from Indian and global investors—and a lot of it has to do with prime minister Modi.

Weigh anchor

India has 13 major ports and 176 minor ports. The country differentiates its ports on the basis of jurisdiction—major ports come under the central government, while minor ports come under the state government. Almost 90% of India’s foreign trade goes through sea ports, of which nearly 57% is handled at major ports.

But since the turn of the century, India’s major ports have lost out as much as 20% of their total cargo to minor ports due to inadequate capacity and longer turnaround time—the time taken to unload and reload freight. It hasn’t helped that the number of minor ports has steadily grown in the last decade and a half.

And as the Modi government seeks to push manufacturing and revive India’s power and coal sectors, the country’s minor ports are coming back into focus. “There will be further consolidation in India’s port sector, largely because everybody is anticipating the government to help the port sector in a big way. As India’s coal and power projects are also expected to kickstart, ports will be buzzing with activity,” Anand Sharma, director at Mumbai’s Mantrana Maritime advisory, told Quartz. Sharma believes that it will be worthwhile for companies to buy ports at lower valuations now, since the rewards are expected to be better in the long term.

And many are banking on Modi’s stellar history of transforming the maritime sector in Gujarat, as the western Indian. Last fiscal, cargo traffic at non-major ports in Gujarat grew by 8%—and accounts for more than 70% of the total cargo handled by non-major ports in India.

“As this government looks to boost manufacturing and exports, it will be the ports that will play a crucial role. And the new government is actively studying all the issues in the sector and many of the regulatory concerns will become a thing of the past,” said Vishwas Udgirkar, partner at Deloitte Touche Tohmatsu.

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