Indian ports are expected to see container traffic grow at a 7-9% annual rate through FY28, driven by rising domestic consumption. While container volume rises, coal traffic is likely to decline by 2-4% as the country shifts toward renewable energy. Investors should monitor how these changing cargo patterns impact the profitability and infrastructure utilization of major port operators.
The Indian maritime sector is entering a period of transformation, with container traffic emerging as the primary driver for growth. Between fiscal years 2026 and 2028, container volumes at Indian ports are projected to expand at a compound annual growth rate (CAGR) of 7-9%. This growth is supported by a steady increase in domestic consumption and the broader adoption of containerized logistics across various manufacturing sectors.
Divergent Trends in Cargo Commodities
While container traffic shows strength, other segments are expected to follow different paths. Coal traffic is forecasted to face a compound annual decline of 2-4% through FY28. This shift is primarily due to increased domestic coal production and a faster transition toward renewable energy sources, which reduces reliance on imported coal. Despite this overall trend, coastal movement of coal is expected to remain a steady contributor to port volumes.
In the energy sector, petroleum, oil, and lubricants (POL) are expected to see a modest growth of 2-4% annually. While demand for fuel remains stable, the rise of alternative energy integration and better fuel efficiency are moderating factors. Conversely, iron ore traffic is showing signs of recovery, with an expected growth of 5-7% annually. This rebound is largely linked to the increased movement of ore to domestic steel plants and higher import levels, which have become more common as domestic ore prices remain elevated.
Sector Performance and Infrastructure Context
These projections follow a robust fiscal year 2026. India’s major ports recorded a cargo volume increase of approximately 7% year-on-year, reaching 915 million metric tons. During that period, POL and crude oil accounted for nearly 30% of total cargo, showing a strong 16% year-on-year increase. Non-major ports, meanwhile, saw a more modest growth of 1.4%, reaching 753 million metric tons, with a notable 52% rebound in fertilizer volumes.
The sector’s ability to sustain this growth depends on consistent infrastructure development and policy support. Government initiatives such as Sagarmala and the Maritime Amrit Kaal Vision 2047 are aimed at enhancing port capacity and efficiency. However, the realization of these targets faces practical hurdles, including the need to bridge connectivity infrastructure gaps and resolve potential delays in policy implementation. Environmental regulations also remain a key factor that port operators must navigate. Investors tracking this sector should monitor the actual utilization rates of new capacity and any shifts in the cargo mix that could impact operating margins, as companies with higher exposure to declining segments like coal may face different pressure than those focused on high-growth containerized trade.