Port Tariffs in India: Legal Framework, Procedures, and Practical Implications

Posted On - 20 September, 2025 • By - Athira T S

Executive Summary

Tariffs are at the heart of port operations. They determine the cost of using berths, cargo terminals, pilotage, warehousing, and port lands, and thus directly influence the competitiveness of India’s logistics chain. Historically, tariffs at major ports were centrally regulated by the Tariff Authority for Major Ports (TAMP) under the Major Port Trusts Act, 1963. However, this model, premised on cost-plus regulation, was seen as rigid and unattractive for investors.

The Major Port Authorities Act, 2021 (“MPA Act”) marked a paradigm shift. It empowered Boards of Major Port Authorities to fix tariffs, subject to central government policy, while creating an Adjudicatory Board (operationalized in August 2025) for disputes. For PPP terminals, tariffs are now discovered at the bidding stage under the Tariff Guidelines, 2021 embedding market principles rather than regulatory ceilings.

Meanwhile, non-major ports, regulated by State Maritime Boards, follow state-specific tariff orders, often more flexible than the major port regime.

Introduction: Why Tariffs Matter in Ports

Tariffs at ports are not mere administrative rates; they are:

  • Revenue sources for port authorities and terminal operators.
  • Determinants of competitiveness: high tariffs can divert traffic to competing ports.
  • Investment drivers: predictable tariff regimes are essential for financing PPP projects.
  • User costs: shippers, logistics companies, and ultimately consumers bear these charges.
  • A transparent and predictable tariff regime is, therefore, a cornerstone of efficient port governance.

Evolution of Port Tariff Regulation in India

1. Early Years (Pre-1997)

  • Major ports governed by the Major Port Trusts Act, 1963.
  • Boards of trustees fixed tariffs individually, with broad government oversight.
  • Lack of uniformity, limited investor confidence.

2. Creation of TAMP (1997)

  • TAMP established as a statutory authority under amendments to the 1963 Act.
  • Mandate: regulate tariffs for services and assets at all major ports.
  • Methodology: cost-plus, based on audited expenditure and reasonable returns.
  • Strengths: transparency, user protection.
  • Weaknesses: rigidity, excessive paperwork, litigation, uncompetitive against state ports.

3. The Shift Towards Autonomy (2000s–2010s)

  • Multiple TAMP guidelines (2005, 2008, 2013, 2019) attempted to simplify processes.
  • PPP concessionaires often struggled under tariff caps.
  • Non-major ports, with flexible state regimes, gained traffic and investments.

4. Enactment of MPA Act, 2021

  • Replaced the Major Port Trusts Act, 1963.
  • Empowered Boards of Major Port Authorities to fix tariffs.
  • Established framework for Adjudicatory Board.
  • Issued Tariff Guidelines, 2021 for PPP projects.

5. Transition to Adjudicatory Board (2025)

  • TAMP phased out.
  • Adjudicatory Board constituted in August 2025, with Justice Ashish J. Desai as Presiding Officer.
  • Jurisdiction includes tariff disputes, user complaints, and PPP project issues.

Statutory Framework under the MPA Act, 2021

1. Authority to Fix Tariffs (Sec. 34)

  • Boards of Major Port Authorities may fix scales of rates for:
  • Services: pilotage, towage, bunkering, cargo handling, warehousing.
  • Use of assets: berths, cranes, storage yards.
  • Dues: port dues, wharfage, berth hire, anchorage charges.

2. Role of Central Government

  • Issues policy directions (Sec. 111).
  • Tariff Guidelines, 2021 are key policy instruments for PPPs.
  • Central override ensures national uniformity.

3. Publication and Transparency

  • Boards must publish tariffs and conditions on official websites/gazettes.
  • Non-discrimination principle applies: no arbitrary preferential treatment.

Tariff Fixing Procedures in Detail

Step-by-Step Process:

  1. Assessment: Port departments assess service costs, market benchmarks, and competition.
  2. Draft Tariff Schedule: Prepared by finance/traffic wings.
  3. Review: Scrutinized by internal tariff committees and legal teams.
  4. Board Approval: Passed by resolution in Board meeting.
  5. Publication: Official notification and website publication.
  6. Implementation: Tariffs enforced from effective date.
  7. Review Cycle: Periodic review, usually every 2–3 years, or sooner if needed.

Principles Applied:

  • Market orientation: competitive positioning considered.
  • User feedback: sometimes user consultations conducted.
  • Discounts/rebates: permitted if transparent and uniform.
  • Indexation: tariffs often linked to WPI/CPI.

Land Rentals and Estate Tariffs:

  • Independent valuation → Board approval → transparent bidding.
  • Rentals revised every 5 years (often WPI-linked).
  • Significant revenue source for ports.

Tariffs in PPP Concessions

1. Legacy BOT Concessions

  • Governed by TAMP guidelines of 2005/2008/2013/2019.
  • Tariffs capped by regulator, often below market.
  • Resulted in disputes, revenue stress, and refinancing challenges.

2. Tariff Guidelines, 2021

  • Applicable to concessions bid post-2021.
  • Tariffs are bid-discovered: revenue share, royalty, or upfront payment drives economics.
  • Operator free to offer discounts, but not exceed bid ceiling.
  • Provides predictability and aligns with global PPP practices.

3. Migration of Legacy Projects

  • Legacy PPPs may seek migration to 2021 regime.
  • Requires Ministry and Board approval.
  • Critical issue in M&A and debt refinancing transactions.

Tariffs at Non-Major Ports

1. State Maritime Boards

  • Examples: Gujarat Maritime Board (GMB), Maharashtra Maritime Board (MMB).
  • Issue Schedules of Port Charges covering vessel and cargo dues.
  • Tariff revision typically periodic (every 2–3 years).

2. Flexibility and Competition

  • Non-major ports enjoy tariff flexibility, enabling them to attract cargo.
  • Often offer incentives for coastal shipping and bulk cargo.
  • Competitive pressure on major ports to remain efficient.

Dispute Resolution and Appellate Process

1. Adjudicatory Board

Jurisdiction: disputes between port authorities and concessionaires, user complaints, legacy tariff issues.

Procedure:

  • Complaint filing;
  • Notice to respondents;
  • Hearings (oral/written submissions);
  • Final reasoned order.

2. Appeals (Sec. 59)

  • Appeals lie only to Supreme Court.
  • Limitation: 60 days (extendable).
  • SC has suggested creation of a special appellate tribunal due to technical nature of tariff disputes.

3. Bar of Civil Court Jurisdiction (Sec. 60)

  • Civil courts barred from tariff disputes under the Act.
  • High Courts may still entertain writ petitions but usually defer to statutory remedies.

Offences and Penalties

1. General Penalty (Sec. 62): Contravention punishable with fines; imprisonment in serious cases.
2. Corporate Liability (Sec. 63): Directors/managers liable if offence committed with their consent/neglect. Defence: due diligence.
3. Cognizance (Sec. 64): Courts may act only upon complaint by an authorised Board officer.
4. Illustrative Offences: Non-payment of tariffs, violation of lease/licence terms, obstructing navigation or port operations, damage to port property.

Comparative Global Context

  • Singapore & Rotterdam: landlord port model; tariffs market-driven, with oversight.
  • US ports: often municipally governed, tariffs competitive.
  • India: hybrid — Boards fix tariffs under MPA Act, but subject to strong central policy control.

Practical Implications

1. Concessionaires: Tariff predictability under 2021 guidelines improves bankability. Need to negotiate change-in-law, termination, and indexation clauses carefully.
2. Lenders: Must assess applicable tariff regime in due diligence. Tariff risk central to project financing models.
3. Port Users: Greater transparency in published tariffs. Can file grievances before Adjudicatory Board.

Key Challenges

  1. Appeal bottleneck: SC as sole appellate forum is unsustainable.
  2. Transition disputes: migration of legacy PPPs remains contentious.
  3. Policy override risk: central policy directions may curtail board autonomy.
  4. Competition from non-major ports: tariff flexibility at state ports challenges major port revenues.

Conclusion

Tariff regulation in Indian ports has undergone a profound transformation. The MPA Act, 2021 and Tariff Guidelines, 2021 have moved the sector from centralized cost-plus control to board-led, market-oriented tariffs. The establishment of the Adjudicatory Board in 2025 marks an important step in dispute resolution, though the absence of a dedicated appellate tribunal remains a structural gap.

For stakeholders, the message is clear:

  • Concessionaires must structure projects around tariff regimes with well-drafted protections.
  • Lenders must carefully diligence tariff applicability.
  • Users must utilize the new grievance redressal framework.

India’s reforms, if consistently implemented, will make its ports more competitive, transparent, and attractive to global investors but the system must evolve further with an appellate body, clear migration rules, and consistent tariff policies.

Contributed by – Amiy Kumar