Port-Led Development and Economic Returns: Comparative Empirical Assessments of the Great Nicobar Island Project

Abstract

In recent years, the Indian national government has aimed to place a Rs 44,000 crore transhipment port at Galathea Bay. This paper looks to investigate, examine, and simulate comparable ports that can shed light on this upcoming project’s long-term benefits, costs and risks. It constructs a verified panel of 94 annual turnover records for six similar hubs from 1999 to 2025, estimates seven unique regression models, and ultimately performs a test using a cost-benefit model summing 20,000 Monte Carlo simulations. Hub traffic mainly comes to look closer at world trade, with elastic values  about 1.5, rather than the host economy. As a result, success has depended on securing a major shipping line before opening. In reality, the port returns a positive economic value to India in only 5.5% of simulations. Without traffic near 16 million TEU, an early carrier commitment and staged construction, its strategic benefits would need to be worth Rs 740 to 1,780 crore a year to even justify its continuation on the Andaman-Nicobar Islands.