Govt may grant infrastructure status to logistics sector soon

The logistics sector will soon get the status of infrastructure, a move that will help the industry raise funds at competitive rates and boost India's trade, a senior government official said.

The proposal mooted by the commerce ministry has been approved by the finance ministry, the official said, adding that "a notification in this regard would be issued soon".

"Huge investments are required in the sector to boost the country's trade, and granting infrastructure status would help the industry attract investments," the government official said.

The definition of logistics includes industrial parks, warehouses, cold storages and transportation.

This status would help the sector get credit at competitive rates and on a long-term basis as rising logistics cost impacts global competitiveness of exporters.

Realising the importance of the logistics sector to promote trade, the government has created a separate special secretary-level post in the commerce ministry to coordinate with all the ministries concerned and departments.

Earlier, there was no single department or ministry to look at all the aspects related to logistics covering various modes of shipment such as sea, roads and railways.

Exporters, too, have time and again demanded a specific department to deal with the issues related to logistics.

Logistics costs of exports are very high in India and due to this, Indian goods are less competitive in global markets.

According to a report, around 14 per cent of the total value of goods goes into the logistics cost. On the other hand, in other major economies, this is just 6-8 per cent.

A strategy paper released in 2010 by the commerce ministry had emphasised on the need to invest billions of dollars in improving infrastructure, including logistics, to boost exports.