The ongoing Sagarmala project, launched in 2015, will drastically reduce the logistics cost in the country and make the industry competitive, according to Kailash Kumar Aggarwal, Joint Secretary in the Union Ministry of Shipping, who is in-charge of the project.
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.
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 cost of exports are very high in India. Nearly 14 per cent of the total value of goods goes into logistics cost, while in other major economies it is just 6-8 per cent of total value of goods, rendering Indian goods less competitive in the global market.
5 multi-modal logistics parks would also be set up at a cost of Rs 3,553 crore, as part of Sagarmala, which would truly transform the sector. He said the AIIB, the ADB and other multi-lateral development banks would have to play a key role in the project.