Govt grants infrastructure status to Logistics sector
20 Nov 2017 10:35 PM IST
New Delhi: The government has given infrastructure status to logistics sector, covering cold chain and warehousing facilities, a move that is likely to attract more funding at competitive rates for these segments.
The government has been working on ways to attract more investments into transport and logistics as part of efforts to bolster infrastructure development in the country.
Amending the existing framework, a notification issued by the Department of Economic Affairs (DEA) has widened the category of infrastructure sub-sectors to "transport and logistics" from the earlier sub-head of "transport".
Having the infrastructure status would help the logistics sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters.
Logistics costs of exports are very high in India and due to this, Indian goods are less competitive in global markets.
The definition of logistics includes industrial parks, warehouses, cold storages and transportation.
According to the notification, logistics infrastructure includes "Multimodal Logistics Park comprising Inland Container Depot (ICD) with minimum investment of Rs 50 crore and minimum area of 10 acre".
Further, a cold chain facility having an investment of at least Rs 15 crore as well as warehousing facility with investment of minimum Rs 25 crore would come under logistics infrastructure. In both cases, the facilities should also have a minimum required area.
As part of the changes in the classification, the DEA -- which comes under the finance ministry -- has updated the 'Harmonised Master List of Infrastructure Sub-sectors'.
Besides transport and logistics, the list comprises energy, water and sanitation, communication, social and commercial infrastructure.
Roads and bridges, ports, shipyards, inland waterways, airport, railway track, tunnels, viaducts, terminal infrastructure including stations and adjoining commercial infrastructure are all part of the transport and logistics classification.
'Move to lure funds, boost output, raise GDP growth'
New Delhi: The logistics sector has been granted infrastructure status which will help it access loans on easier terms, encourage manufacturing in the country and help improve economic growth, the government said on Monday.
The cost of logistics in India is very high compared to developed countries and the sector's development will provide a boost to domestic as well as external demand, encouraging manufacturing and job creation, it said.
The sector covers cold chain, warehousing facilities and multimodal parks comprising Inland Container Depot (ICD), subject to certain conditions.
The finance ministry said in a statement that the grant of infrastructure status will enable the logistics sector "to avail infrastructure lending at easier terms with enhanced limits, access to larger amounts of funds as External Commercial Borrowings, access to longer tenor funds from insurance companies and pension funds".
The sectoral players would also be eligible to borrow from India Infrastructure Financing Company Ltd (IIFCL).
"High logistics cost reduces the competitiveness of Indian goods both in domestic as well as export market.
Development of logistics would give a boost to both domestic and external demand thereby encouraging manufacturing and job creation," the ministry said.
"This will in turn be instrumental in improving country's GDP," it added.
According to a notification in this regard, logistics infrastructure includes "Multimodal Logistics Park comprising Inland Container Depot (ICD) with minimum investment of Rs 50 crore and minimum area of 10 acre".
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