New Delhi, May 2: A recent report highlights that the Great Nicobar Project could transform India’s geographical advantages into economic strength, strategic depth, and maritime influence.
This remote island project is costly and carries implementation risks. However, the core idea is valid: if a geographical area is not utilized, it is lost. This insight comes from renowned economist Hans Kaufmann, who specializes in global financial policy, writing for ‘India Narrative.’
Kaufmann clarified that the Great Nicobar Project is not intended to militarily ‘encircle’ China, as the distance and disparity in military power make this unfeasible. Instead, it positions India strategically near a maritime route heavily relied upon by the Chinese economy, enhancing India’s monitoring and logistical capabilities.
He stated, “If India executes this correctly, it will be the most significant maritime infrastructure decision since independence. However, if done carelessly, it could result in an incomplete port that damages a precious environment. The difference lies not in ambition but in better governance.”
According to the government, the project aims to transform Great Nicobar into a strategic maritime and economic hub. Located near a global east-west shipping route, it will reduce dependence on foreign transshipment ports, which is crucial for India’s defense and national security.
This initiative will strengthen India’s strategic presence in the Andaman Sea and Southeast Asia. It also emphasizes economic development while ensuring environmental protection and safeguarding local communities.
The report notes that despite India’s extensive coastline and location along the Indian Ocean, it has relied on foreign ports like Singapore, Colombo, and Port Klang for years to transport its goods. Approximately 3 million containers (TEUs) of Indian goods are shipped through foreign ports annually, with over 85% handled by just three ports.
This reliance costs India around $200-220 million each year. The report states, “India has effectively been a tenant in its own region. The Great Nicobar Project represents the first serious attempt to change this status quo, with ambitions extending far beyond shipping logistics.”
Notably, if an International Container Transshipment Terminal is established here, India could retain revenue currently flowing abroad. This would save time for exporters and enhance India’s global trade competitiveness.
Government estimates suggest that by 2040, the project could generate approximately $3.16 billion annually, with total costs ranging from $7.90 to $8.53 billion. Additionally, while the project aims to create 50,000 jobs, this figure is not guaranteed. However, the economic rationale behind the project is robust.
The report concludes that both India’s ‘Maritime India Vision 2030’ and the ‘Sagarmala Program’ prioritize port-based development. Great Nicobar is poised to turn this goal into a tangible geographical advantage.
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