Facilitated by long coastlines, vast marine areas, and leading global seaports, South Asian countries in the Commonwealth tend to be important players in the global ocean domain. As such, the maritime & shipping sector handles a significant share of these countries’ global maritime trade. Trade & growth in the Commonwealth of South Asia seem to be on a recovery trajectory from the devastating impact of the Covid-19 pandemic. However, skyrocketing freight rates on major shipping routes are likely to fuel rising trade costs. In the meantime, maritime security and other risks may affect exports to Western markets and derail the recovery. A set of policies aimed at improving logistics, facilitating trade, & ensuring environmental sustainability may help in harnessing the power of maritime trade in building back a better Commonwealth South Asia.
Profile of Maritime Trade
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Statistics prove that South Asia is the largest region globally, with approximately a quarter of the world’s population represented. The bulk of the region’s population lives in the 5 larger countries (Bangladesh, India, the Maldives, Pakistan & Sri Lanka), which are members of the Commonwealth. The Commonwealth becomes an intergovernmental organization that comprises 54 countries. Maritime shipping is bracing itself to emerge as an important sector in Commonwealth South Asia.
One of the notable initial conditions for maritime shipping activity is the long coastline and extensive maritime domain of the Commonwealth of South Asia. The marine area of the Commonwealth South Asian countries is close to equalling their land & sea mass areas. Diverse variances indicate that the marine area is 30% of the landmass for Pakistan, while for the island of Sri Lanka, it represents 800%. Conversely, for the Maldives, the marine area is even larger, reflecting an area 3,000 times larger than its landmass! These figures indicate the huge unexploited potential of maritime trade, shipping & the wider ocean economy. The Maldives becomes one of the world’s largest ocean states, ranking the third largest globally in terms of marine-to-land area ratio.
The gradual integration of Commonwealth South Asia into the world trading system follows the adoption of economic reforms, which in recent decades have shifted the focus of global production & trade to Asia. Maritime trade routes handle around 80% of global merchandise. The same applies to the trade flows of the five Commonwealth South Asian countries. The shipping & maritime sector provides a lifeline to these countries by linking manufacturing centers in East Asia with export markets in Europe & North America. Before the pandemic, the combined merchandise exports of these 5 Commonwealth countries amounted to US$400 billion (S$536.84 billion) 6 years back in 2019.
Since 5 years back from 2000, the volume of container traffic handled at seaports in Commonwealth South Asia has risen nearly 6-fold to around 30 million twenty-foot equivalent units (TEUs) until 19 years later & 6 years back in 2019. By 2019, these countries’ share of the total container traffic among the 54 Commonwealth members rose to 28%. This level reflects a 17% increase from 2000. This increase can be recognised as being largely due to India’s maritime trade expansion. Notably, India is one of the largest Commonwealth maritime traders. Since 2000, Indian container traffic has increased approximately 10-fold, rising from about 2 million TEUs to around 20 million TEUs recorded in 2019.
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Interestingly too, Commonwealth South Asia is home to 5 important seaports that appeared in the Lloyd list of top 100 global container shipping ports as of 5 years back in 2020. 2 of them are Indian, being Jawaharlal Nehru and Mundra, with their global ranking reflected as being 33rd & 37th, respectively. Sri Lanka’s Colombo port ranks 24th, while Bangladesh’s Chittagong port ranks 58th & Pakistan’s Karachi port ranks 85th!
