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Logistics sector gets infrastructure status
November 23 , 2017
2429 days
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- The union Finance Ministry has granted infrastructure status to the logistics sector.
- Logistics infrastructure includes
- multi-modal logistics park comprising an inland container depot
- cold chain facility
- warehousing facility
- The implications of getting infrastructure status include
- It will get longer maturity loans compared to typical manufacturing sector
- It will be eligible for slightly higher equity ratios while applying for loans
- It will have certain advantages and flexibility while applying external commercial borrowing
- It will allow doing refinancing with specialized lenders like IDFC, IIFCL etc
- It is expected that it will improve efficiency and reduce the cost of capital in transportation and warehousing, thereby reducing the cost of logistics.
- Development of logistics would give a boost to both domestic and external demand thereby encouraging manufacturing and 'job creation' which in turn be instrumental in improving country's GDP.
- In 2017, India’s logistics performance improved from 54 to 35 under World Bank Logistics Performance Index (LPI).
- It was recommended by the Commerce Ministry and subsequently approved by Finance Ministry.
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