Sri Vijaya Puram, June 24: Improving maritime connectivity and expanding competition in the cargo transportation sector are essential for reducing logistics costs and supporting future economic growth in the Andaman and Nicobar Islands, according to shipping industry representative Sumant Ahlawat.
Speaking during a session at the Andaman Ideas Summit 2026, Ahlawat said shipping would be a critical component of the islands’ development trajectory, particularly as large-scale infrastructure projects gather momentum across the archipelago, including proposed developments in Great Nicobar.
Responding to questions on his company’s experience since beginning operations in the islands about four months ago, Ahlawat said the sector has shown encouraging signs of progress but still requires substantial improvement to meet future demand.
He noted that major infrastructure projects envisioned for the islands would depend heavily on efficient cargo movement. Construction materials, heavy machinery and other equipment required for such projects can only be transported economically in large quantities through maritime routes.
“Shipping is not merely a support service but a foundational requirement for infrastructure development in island territories,” he observed during the discussion, emphasizing that air transport cannot handle the scale of cargo needed for large projects.
Ahlawat pointed out that cargo movement between the Indian mainland and the islands remains constrained by limited vessel availability. According to him, only a small number of ships currently operate on the route, with most vessels carrying between 3,000 and 4,000 tonnes of cargo. This limits overall transportation capacity and affects the efficiency of supply chains serving the islands.
Addressing concerns over the slow pace of growth in the shipping sector, he said policy attention towards maritime connectivity has become more visible in recent years. He also credited the local administration for creating a supportive environment for new operators seeking to enter the market.
As a relatively new entrant, Ahlawat said his company had found the administration transparent and receptive to encouraging competition. However, he acknowledged that new operators often face resistance from established players in the sector.
Such resistance, he argued, ultimately works against the interests of the islands, where a larger number of operators could improve service quality, expand cargo capacity and create a more competitive market.
Ahlawat further contended that limited competition had historically contributed to higher freight rates. He described the market as having effectively operated under a duopoly, with only two major operators handling most cargo traffic between the mainland and the islands.
The entry of additional players, he said, has already begun to influence pricing. While noting that island residents and businesses would be best positioned to judge the impact, he estimated that freight costs have declined by approximately 30 to 40 per cent following the introduction of new services.
The discussion touched upon a longstanding concern among residents and businesses in the Andaman and Nicobar Islands, where transportation expenses significantly influence the cost of consumer goods. Participants at the summit noted that improvements in shipping infrastructure, vessel capacity and market competition could play a key role in improving affordability, strengthening connectivity and supporting long-term economic development across the islands.
As infrastructure ambitions grow and cargo requirements increase, maritime transport is expected to remain at the centre of discussions on the future economic landscape of the Andaman and Nicobar Islands.
