Logistics sector gets infrastructure status
20 November 2017
The government has granted infrastructure status to the logistics sector, a move that will help the industry raise funds at competitive rates and boost India's trade, an official release stated today.
This in turn will help reduce logistics cost and improve 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 need for integrated logistics sector development has been felt for quite some time in view of the fact that the logistics cost in India is very high compared to developed countries.
The proposal mooted by the commerce ministry has been approved by the finance ministry, the official release said.
The inclusion of ''Logistics Sector'' in the Harmonized Master List of Infrastructure Sub-sectors was considered at the 14th Institutional Mechanism (IM) Meeting held on 10 November 2017, which was subsequently approved by the union finance minister Arun Jaitley.
''Logistics Infrastructure'' is included by insertion of a new item in the renamed category of 'Transport and Logistics', with a footnote stating that "Logistics Infrastructure'' means and includes multi-modal logistics park comprising inland container depot (ICD) with minimum investment of Rs50 crore and minimum area of 10 acre, cold chain facility with minimum investment of Rs15 crore and minimum area of 20,000 sq ft, and/or warehousing facility with investment of minimum Rs25 crore and minimum area of 1 lakh sq ft.
It will enable the logistics sector to avail of infrastructure lending at easier terms with enhanced limits, access to larger amounts of funds as external commercial borrowings (ECB), access to longer tenor funds from insurance companies and pension funds and be eligible to borrow from India Infrastructure Financing Company Limited (IIFCL).