Ur­gency to de­velop lo­gis­tics in­fra­struc­ture

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Cargo Talk - - Guestcolumn -

In­fra­struc­ture is crit­i­cal to the growth of econ­omy and lo­gis­tics in­fra­struc­ture in par­tic­u­lar with a well-de­signed ex­ten­sive net­work of roads, bridges, rail­ways, ocean and air routes, ports and air­ports is one of the vi­tal growth drivers for in­dus­try and trade. In­dia is one of the fastest grow­ing ma­jor economies in the world with an ex­pected GDP growth rate of over 7.5 per cent.

How­ever, its lo­gis­tics in­fra­struc­ture is con­sid­ered highly in­ca­pable of sup­port­ing the ex­ist­ing and pro­jected high growth rates. Cur­rently In­dia spends around 14.4 per cent of its GDP on lo­gis­tics and trans­porta­tion as com­pared to less than eight per cent by the other de­vel­op­ing coun­tries. Re­al­is­ing the im­por­tance and ur­gency to de­velop In­dia’s lo­gis­tics in­fra­struc­ture and en­hance its op­er­at­ing ef­fi­ciency, Gov­ern­ment of In­dia has un­der­taken a num­ber of ini­tia­tives to­wards fa­cil­i­tat­ing trade.

Nitin Gad­kari, Min­is­ter of Ship­ping, Road Trans­port & High­ways, Gov­ern­ment of In­dia, said “Ship­ping is just not fer­ry­ing of goods and pas­sen­gers. It is all about the growth of the na­tion as it pro­motes trade.” In­dian freight trans­port mar­ket is ex­pected to grow at a CAGR of 13.35 per cent and to be worth US$ 307.70 bil­lion by 2020 driven by the growth in man­u­fac­tur­ing, re­tail, FMCG and e-com­merce sec­tors. Of the to­tal freight move­ment, road con­sti­tutes around 63 per cent and ex­pected to in­crease at a CAGR of 15 per cent, sea con­sti­tutes around nine per cent and is mainly used as a ma­jor mode for im­ports and ex­ports and air con­sti­tutes around one per cent of and ex­pected to grow around 12.5 per cent CAGR over the next five years. With geopo­lit­i­cal ad­van­tages of hav­ing a long coast­line of over 7,500 km and nav­i­ga­ble in­land wa­ter­ways of over 14,000 km, be­ing recog­nised as the fourth most at­trac­tive FDI des­ti­na­tion in the world as per UNC­TAD, hav­ing an ab­so­lute sin­gle-party ma­jor­ity gov­ern­ment at the cen­tre fo­cused on de­vel­op­ing this sec­tor through var­i­ous ini­tia­tives like port mod­erni­sa­tion and de­vel­op­ment, in­land wa­ter­ways, hin­ter­land con­nec­tiv­ity and mul­ti­modal lo­gis­tics and with Na­tional In­te­grated Lo­gis­tics Pol­icy (NILP) fo­cused on im­ple­men­ta­tion of in­fra­struc­ture de­vel­op­ment pro­grammes for rail and coastal Ded­i­cated Freight Cor­ri­dors (DFC), na­tional ex­press­ways and last-mile roads and rail, lo­gis­tics mar­ket in In­dia should not sur­prise an­a­lysts if they ex­ceed the es­ti­mated CAGR of over 12 per cent by 2020.

In­dian freight trans­port mar­ket is ex­pected to grow at a CAGR of 13.35 per cent and to be worth US$ 307.70 bil­lion by 2020

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