Analysis of Indian Port Performance Post Reforms in an Overlapping Hinterland: A Segmented Regression Approach

Abstract

India has about 12 major ports under the aegis of the Indian Government, in its approximately 7,500 km long coastline and competing with another 200 state- government-run ones. Over the last 20 years, the Indian government has implemented several reforms. This article answers two research questions. RQ1: Have port reforms improved port performance? RQ2: Do ports with overlapping hinterlands compete, or does one port’s performance complement the other? The article proposed a composite operational port performance index (PPI) and carried out a breakpoint (segmented) regression analysis to study the impact of port reforms. This article makes three crucial propositions––First, port performance affects its output, that is, the ship calls when competition is high, but the same does not hold if the port enjoys monopoly or oligopoly status or due to other factors such as cargo demand. Second, performance of ports with lower capacity, also referred to as satellite ports, is affected by the performance of its complementing ports with higher capacity. Third, Reforms may lead to competition and cannibalisation of profits and growth of ports in a dynamic environment.