The Role of the Sagarmala Project in Helping Indian Businesses Achieve ESG Goals

Abstract

Introduction: The Sagarmala Project, an ambitious initiative by the Government of India, is designed to modernize port infrastructure, enhance logistics efficiency, and promote coastal economic development. As businesses increasingly align with Environmental, Social, and Governance (ESG) principles, this project provides a significant opportunity to support sustainability, social responsibility, and transparent governance. With over 7,500 km of coastline and vast inland waterways, India holds significant potential for maritime-led development, and the initiative plays a pivotal role in reducing logistics costs and increasing the competitiveness of Indian businesses in global trade.

Methodology: The study uses a systematic literature review to compare road and maritime transport in terms of cost, emissions and efficiency. The theoretical framework is based on ESG principles to assess maritime sustainability. Model selection uses comparative models of road versus sea transport, evaluating cost per ton-km to assess economic feasibility, emission outputs to quantify environmental benefits, and operational efficiency metrics such as cargo capacity and fuel consumption rates. An ESG assessment framework is incorporated to measure the Sagarmala Project's impact on corporate sustainability, carbon reduction and supply chain resilience. A conceptual framework is developed to illustrate the relationship between transportation mode selection, carbon emissions and logistics costs, and ESG performance improvements through coastal and inland water transport.

Results & Discussion: Maritime transport cuts emissions by up to 40% and costs by 30% compared to road transport (Rodrigue et al., 2020; World Bank, 2022), while Kumar and Patel (2021) estimate that port-led development under Sagarmala could cut India's carbon footprint by 33-35% by 2030. Coastal shipping consumes only 10% of the energy required for road transport, and a standard cargo ship can move one ton of goods approximately 500 km per litre of fuel against 50-100 km for a truck, making sea transport nearly 5-10 times more fuel-efficient. Ships can carry up to 200,000 tons of cargo compared with 20-40 tons per truck. India's road network spans 6.4 million km and manages 64.5% of freight; the project aims to shift 25-30% of road freight to maritime transport. Transitioning could reduce logistics costs by 30-50% while cutting CO₂ emissions by 80%, given that road transport accounts for 75% of transport-related CO₂ emissions against 11% from shipping. The project is expected to create over 10 million jobs and has mobilised over ₹5 lakh crore in investments, supported by a 40% discount on vessel and cargo charges and a GST reduction on bunker fuels from 18% to 5%.

Conclusion: The Sagarmala Project presents a transformative opportunity for Indian businesses to embed Environmental, Social, and Governance principles into their operations. By enhancing logistical efficiency, reducing environmental impact, and promoting social inclusivity, it serves as a model for sustainable economic growth while aligning with India's global ESG commitments. Sea transport offers a significantly more fuel-efficient, cost-effective and environmentally friendly alternative compared to road transport, and with policy incentives, infrastructure development and increased private sector involvement, coastal shipping can revolutionize India's supply chain. To ensure long-term success, it is essential to address last-mile connectivity issues and streamline regulatory frameworks.