Logistics sector gets infrastructure status

The government has granted infrastructure status to logistics sector. 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. High

logistics cost reduces the 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?. This will in turn be

instrumental in improving the country?s GDP.

The inclusion of Logistics Sector in the Harmonized Master List of Infrastructure Sub-

sectors was considered in the 14 th Institutional Mechanism (IM) meeting held on

November 10, 2017. It was recommended by the Institutional Mechanism and

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 Rs 50 crore and minimum area of 10 acre, Cold Chain Facility

with minimum investment of Rs 15 crore and minimum area of 20,000 sq ft, and/or

Warehousing Facility with investment of minimum Rs 25 crore and minimum area of one

lakh sq ft.

It will enable the logistics sector to avail 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 Ltd (IIFCL).