This paper examines how port policy design translates into performance outcomes by focusing on the mediating roles of institutional stability and operational efficiency. Port reforms frequently prioritize formal policy instruments and infrastructure expansion, yet comparatively little attention has been given to the governance processes through which policy intent becomes operational practice. The study addresses this gap by drawing on evidence from the Indian port system. The research design is quantitative, using survey data collected from key stakeholders in a representative sample of Indian ports. Structural equation modeling is used to analyze direct, indirect, and serial mediation effects among policy design, institutional stability, operational efficiency, and port performance. As the empirical analysis shows, port policy rarely affects performance through direct channels alone. Instead, its impacts are largely mediated by institutional stability and operational efficiency. Institutional stability emerges as a critical mechanism that supports predictable administrative behavior and facilitates coordination among port actors. Conceptualizing institutional stability as a mediating capacity makes this paper a valuable addition to the existing body of literature on transport policy and port governance, providing an explanatory perspective on the variation in port performance across ports under ostensibly similar policy regimes.