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Infrastructure status to boost Indian logistics sector
Nov '17
Infrastructure status to boost Indian logistics sector
With the Indian logistics sector being granted infrastructure status, government expects the industry to grow 10-15 per cent annually, says a report. It is now included in the infrastructure sub-sectors list under a new head transport & logistics and categories like multi-modal logistics park, cold chain facility and warehousing facility have been defined.

The new status will make it easier for companies operating within these segments to raise long-term credit from banks and other financial institutions at lower rates, and also attract foreign investments, according to a report by JLL India, a professional services and investment management firm.

Warehousing is already seeing big-ticket investments in the country. The government is planning to work with the state governments and the private sector to set up 34 mega logistics parks across the country. It has already allocated Rs 100,000 crore for such targeted development.

The recognition has brought clarity on the minimum land requirement for setting up logistics facilities. To get the infrastructure tag, minimum investment and area requirements for each category of logistic facilities have been spelt out. Firstly, a multi-modal logistics park comprising inland container depot should have a minimum investment of Rs 50 crore along with a minimum area of 10 acres. Secondly, a cold chain facility must have a minimum investment of Rs 15 crore and cover a minimum area of 20,000 sq.ft. Lastly, warehousing facilities must have a minimum Rs 25 crore investment and a minimum area of 100,000 sq.ft.

"India is already home to leading industries such as textiles, automotive components, pharmaceuticals, cement, FMCG, and e-commerce. Private sector companies across these sectors, whose operations depend hugely on warehousing and logistics, are now likely to register tremendous growth in tier 2 and 3 cities. These companies will need a stronger network of warehouses and logistics facilities in smaller cities for growth. The changed status, in turn, will boost the viability of opening up businesses in different regions, translating into more demand and growth," the report said.

According to a recently published JLL report 'The Dawn of India’s Future Cities', India’s logistics and warehousing sector is already destined for a quantum jump with the advent of the unified GST and associated infrastructure push to improve surface and air connectivity across the country. In the future, warehousing and logistics are likely to find good a foothold in emerging urban and semi-urban centres. Developers and several foreign private equity players are now foraying into warehouse developments across Indian cities, coming up with large-scale, high-tech warehousing/logistics spaces with state-of-the-art facilities. (RR)

Fibre2Fashion News Desk – India

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