The logistics industry in Goa is certainly driving the high wave with their involvement in every aspect of trade and commerce. Given how relevant they are in the growth of the economy, if all goes well, India is looking to have not less than 10 logistics parks established within the next two years.
Where it all started…
The Minister for Industries and Commerce in Punjab, Sunder Sham Arora, has already declared that the district of Ludhiana would play home to three mega logistics parks that would in turn help the growth of the industries there. Since logistics is considered an integral part of the state’s industrial policy, the minister, speaking at the Punjab Logistics Coinclave 2018, said that the three parks would come up near the Kila Raipur village.
Fourteen MOUs covering an amount of more than 860 crore were signed by industrialist and the state government during the conclave, according to GM, Mahesh Khanna, of the district industry center, Ludhiana.
The plan of Action
The state governments already have land available for these projects. The plan is to form a special public-private partnership involving state governments, central players and private players. These parks are expected to lease space to these private companies to run their operations thereby saving on the cost of having independent warehouses.
These logistics parks are expected to act as “freight aggregation and distribution hubs” which will enable long haul movement of freight between hubs whether it is through land, water or railways. This will cut down on the overall cost of movement of freight. 365 different government departments which include state governments, ports, transport corporations, aviation ministries and more have been invited to develop a joint multi-modal logistics park policy that will specify price structure, location, design of parks and trunk infrastructure.
Why the need for logistics companies?
Transport minister, Nitin Gadkari, claims that the policy they are looking to develop will reduce logistics cost in half while increasing the movement of freight transport over the highway network. He also suggested that infrastructure status ought to be provided to these logistics parks along with enabling 100% FDI.
At present, India suffers from high logistics costs compared to other countries. However, by optimising warehouses, it is expected to fall by a whopping 15-20 percent. An amount of 1.5 billion dollars has already been invested in India’s warehousing projects by private equity players over the last two years. The largest multi-modal logistics parks are expected to come up in Chennai, Vijaywada, Nagpur, Bangalore, Hyderabad, Surat and Guwahati.
Logistics companies that will make an appearance
Ludhiana will play home to a multimodal logistics park by the Adani Group as well as a logistics park by the Punjab Logistics Infrastructure Limited. The third one that is expected to surface will be by the Punjab State Warehousing Corporation. These three are expected to cover the industrial regions of Jalandhar, Sangrur, Fatehpur, Amritsar, Batinda and more.
Since the state government is in full support of this plan, they have agreed to provide land to industrialists at a cheaper price. Twenty five clusters formed by industrialists have already been approved along with the recent two for the oil expeller industry. Arora said that details pertaining to VAT and GST would be settled by December 2018.
Under this proposed policy, the parks will provide services like customs clearance, warehouse management services, quarantine zones, testing facilities and more to industries. Furthermore, manufacturing functions like final assembling, kitting, labelling, packaging and return management will also be handled by these logistics parks.