Bhavnagar port was in operation since the mid 18th century having trade links with Southeast Asia, Africa, Arabia and ports of Red sea. Extensive modernization of port was carried out in1930s under Mr J. Johnston, Port Officer of Bhavnagar state. Increased facility of wharfs, warehouses, transportation by MG/NG rail system was added. With the passage of time due to heavy silting of Bhavnagar channel, the port had to be shifted in 1950s to a new site 8 km south.A lighted beacon functioned at the Port since 1860. It was an ordinary oil lamp with 150 mm optic hoisted from a mast. In 1890 this light was placed on top of a water tank.
Thus Bhavnagar port had competition on both sides from British i.e. at Dholera and Ghogha. The British took every concievable measure to divert trade from the port of Bhavnagar to their ports of Ghogha and Dholera.
Duties were considerably lowered on merchandize, which was taken to the port of Dholera instead of Bhavnagar. Orders were issued to warn traders who lived in British territory, not to take goods to the port of Bhavnagar. Even posts were established at Vartej and Nari (the two entry points of the city), which levied prohibitive duties on goods passing to Bhavnagar. On the other hand, goods bound of Ghogha were allowed duty free.
Thanks to the then Maharaja Wajesinhji, who lowered the custom receipts of the Durbar and lent money to the cotton merchants, some trade remained and Bhavnagar Port did not collapse totally, even though the income of the Bhavnagar Durbar through custom fell dramatically. This move was foresighted as it saved trade and the port from ruin in Bhavnagar.