India’s maritime sector plays a crucial role in the national economy and strategic planning, supported by a 2,500-kilometre coastline and a network of 12 major and over 200 minor ports. With around 95% of trade by volume and 70% by value moving through maritime transport, the sector plays a significant role in building the nation’s GDP. This growth brings increased complexity and demands stronger oversight. Maritime compliance and risk management goes beyond ships and ports, they extend across the entire supply chain, including factories, refineries, trucking companies, and key personnel. Overlooking these elements can expose organizations to significant risks, making thorough due diligence vital for safeguarding operations and reputation.
Maritime sector in India
The sector includes key components such as shipping, ports, fisheries, and offshore energy. A growing merchant fleet supports both global and domestic shipping. The fisheries sector supports millions of livelihoods and contributes to exports, while offshore energy projects are expanding the country’s resource base. Over the past decade, the nation’s cargo handling capacity has witnessed a remarkable surge, rising from 800.5 million tonnes annually in 2014 to 1,630 million tonnes in 2024, reflecting an impressive 87% growth. The sector plays a vital role in facilitating trade, strengthening national security, and enhancing regional connectivity.
Rising opportunities in the sector
The sector is witnessing rapid growth, driven by large-scale infrastructure initiatives and evolving investment models. Sagarmala Program (2.0) has identified 839 projects, with 272 projects completed – focused on port modernization, coastal connectivity, and sustainable development.
The Public-Private Partnership model allows private entities to manage specific projects, berths or terminals for a fixed tenure after which the assets revert to the Major Port Authority. This model boosts operational efficiency and attracts vital investment in port infrastructure to meet growing trade demands. Additionally, emerging areas such as green shipping, maritime technology, and coastal tourism are gaining momentum.
Risk in maritime operations
- Legal Risks: Disputes over vessel ownership, crew contracts, and regulatory non-compliance can lead to litigation and operational delays.
- Financial Risks: Hidden liabilities, fraudulent documentation, and poor financial practices expose stakeholders to monetary losses and reputation damage.
- Operational Risks: Issues like equipment failure, inadequate maintenance, and untrained crew can disrupt operations and compromise safety.
- Environmental Risks: Oil spills, marine pollution, and climate-related events such as cyclones threaten coastal infrastructure and demand stricter compliance.
- Security & Cyber Risks: Piracy, smuggling, and cyberattacks targeting navigation and cargo systems are rising, especially in high-risk zones like the Red Sea.
Process of Due Diligence
Due diligence in the maritime sector involves a series of targeted checks that help identify and mitigate legal, financial, operational, environmental, and reputation risks. The process includes vessel screening to verify ownership, flag history, and compliance with international regulations. Financial audits, asset verification, and environmental assessments ensure transparency and sustainability. Contractual and stakeholder reviews are conducted to evaluate reputation exposure and confirm that all parties meet regulatory and ethical standards. These steps collectively strengthen risk management and support informed decision making in maritime operations.
Conclusion
As India’s maritime sector continues to expand, driven by infrastructure growth, evolving trade dynamics, and emerging technologies, the importance of due diligence increases. From vessel screening to stakeholder reviews, each step plays a critical role in identifying risks and ensuring operational integrity across the supply chain. In a landscape shaped by legal complexities, environmental challenges, and rising security threats, due diligence serves as a strategic tool for safeguarding investments, maintaining compliance, and building long-term resilience in maritime operations.