Why is Goa not becoming an export hub?

Despite having Dabolim Airport and Mormugao Port Trust (MPT) for decades, Goa has not been able to become an export hub, as even local manufacturers prefer to export their products through airports and seaports in other states of India

| OCTOBER 16, 2017, 03:01 AM IST
Why is Goa not becoming  an export hub?

 

 


Karan Sehgal
PANAJI
Every now and then a concern is raised that Goa does not have a thriving manufacturing sector for whatever reasons. A greater concern is the fact that most companies, which do have their manufacturing operations in Goa, neither use Dabolim Airport nor MPT to export their products.
Intriguingly enough, MPT has to go to Northern Karnataka and Southern Maharashtra to find exporters, who are willing to use its facilities because exporters in Goa haven't showed much interest in doing the same.
In the recent past, a number of steps were taken to improve the infrastructure both at Dabolim Airport and MPT; but, exporters are still not using these facilities leaving both the ports under-utilised.
Satyajit Bhattacharjee, founder secretary, Goa Air Cargo Association, said, "In February 2016, a plug-in facility was created at Dabolim Airport. Plug-in facility was provided so that containers having temperature sensitive cargo like pharmaceutical products can be plugged in. Moreover, bonded trucks can get clearance at Dabolim Airport. However, as on date, the said infrastructure has not been used by any of the exporters."
Other sources have also revealed that companies don't commit adequate cargo to either Dabolim Airport or to MPT. Barring few cases, most pharmaceutical companies in Goa export their products through JNPT (Jawaharlal Nehru Port Trust) near Mumbai.
Suresh Kamath, former president, Goa Pharmaceuticals Manufacturers' Association, said, "Most pharma companies are not willing to export from MPT. When I was the president of this association, I went to every pharma company in Goa, but I could hardly convince anyone to use local port for exports."
Kamath continued, "The export divisions of pharma companies, which have factories in Goa, are either in Mumbai or in Ahmedabad or in other parts of India. It's such bureaucratic hurdles, which prevent pharma exports from happening from Goa."
With pharma sector, the experience has been that if the head office is in Mumbai, then exports typically happen from JNPT even if Goa has MPT. Another source informed, "There are some big Indian pharma companies in Goa. These companies manufacture 50% of their overall export turnover in Goa. But, they decide to export that from other states of India."
Pharmaceutical is the only manufacturing sector, which has achieved critical mass in Goa. If this sector too decides to not make use of Dabolim Airport and MPT, then it will be very difficult to make the state an export hub. Chandrakant Gawas, chairman, Goa Chamber of Commerce and Industry's (GCCI) logistics committee, said, "We are soon going to have a seminar in Mumbai, where we will invite all pharma companies and ask them why they are exporting products made in Goa from JNPT. I am not happy with the volume of container exports happening from Goa right now. To my mind, container export volume should be much higher."
Gawas even said that the production of some of the major exporters in the state has come down, which is also badly affecting exports. The export infrastructure in Goa can be further improved, but no one is willing to make the investment because companies are not committing adequate amount of cargo.
Bhattacharjee explained, "Concor (Container Corporation of India) has a facility near Dabolim Airport for which they have been permitted by customs to accept and clear cargo. As of now, Dabolim Airport doesn't have RA3 certification. European Union (EU) has made it mandatory for airports in countries from where cargo is being imported in EU to have this certification. Concor can get this certification, but for that, it will have to invest Rs 3.5 crore. It will invest so much only if trade commits a certain amount of cargo."
RA3 certification is mostly about safety measures. Not only pharma companies, but no other industry is really coming forward to commit cargo to either Dabolim Airport or to MPT. Seafood exporters are sole exception to this, as they still choose to send their exports through MPT.
As per data obtained from Goa Air Cargo Association, the quantum of cargo exported from Dabolim Airport is abysmally low. In 2016-17, only 48 tons of general cargo was exported from Dabolim Airport, while the number stood at a mere 49 tons in 2015-16.
When iron ore mining was at its peak, MPT used to get a lot of bulk cargo in the form of freshly mined iron ore. But, production levels in mining have dropped considerably since then.
Local exporters from other industries are not utilising MPT adequately. However, the port is managing to get cargo from neighbouring Maharashtra and Karnataka.
A source at MPT said, "We have one container vessel coming to MPT every week. Sometime back, we used to have two such vessels per week at the port. If local trade co-operates by sending cargo through MPT, more container vessels will be willing to come to MPT."
If Goa indeed wants to become an export hub, then the local industry will have to use both Dabolim Airport and MPT for exports. It may be that both these ports lack infrastructure on few counts. But, not using them at all will only deprive the state of an opportunity to become an export hub.
Pharma companies not using MPT for exports
Despite MPT having adequate infrastructure for exports, most pharma companies having factories in Goa are not sending their exports from MPT.
Sources revealed that this is because head offices and export divisions of pharma companies are based out of Mumbai or in other parts of India.
Typically, these pharma companies use JNPT (which is close to Mumbai) for exporting even products made in Goa.
MPT sources say that more container vessels are willing to come to the port if pharma companies commit adequate amount of cargo.
Large Indian pharma companies having manufacturing operations in Goa make around 50% of their overall export turnover in Goa. But, export it through JNPT and not MPT.

Other industries too shun Dabolim
Airport and MPT for exports
Apart from pharma, many other reputed industries have factories in Goa. But, most of them don't use either Dabolim Airport or MPT for exports.
In February 2016, a plug-in facility was created at Dabolim Airport for temperature sensitive cargo. But, hardly any exporters are using it.
Concor can invest Rs 3.5 crore for getting RA3 certification, but, it will do so only if local exporters commit a certain amount of cargo.
MPT is able to get cargo from Northern Karnataka and Southern Maharashtra, but, local exporters are sending their cargo from other parts of India.

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