National Logistics Policy - The Reformist Agenda

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Economy

National Logistics Policy - The Reformist Agenda

Adequate infrastructure creation (including warehousing and transportation) is the need of the hour to make India a US$5 trillion economy. To accelerate investments and help achieve the creation of better warehousing facilities in the country, it is crucial to attract businesses and institutions in the sector. With this as the background, Warehousing Association of India (WAI) recently hosted a conference on National Logistics Policy (NLP): The Road Ahead For Integrated Best-In-Class Infrastructure Development. With Celerity as the content and media partner, this power-packed conference brought together the who’s who from the industry – policy makers, academia, consultants, and the industry stakeholders to discuss and dwell upon the changing landscape of warehousing in the country and the poised role that the National Logistics Policy (NLP) is slated to play. The conference also propagated the adoption of the e-Handbook on Warehousing Standards, which was drafted by WAI and was launched as part of NLP, with a view to pave the way for global competitiveness of the Indian warehousing sector. On the side-lines of the conference, an insightful report, brought together by WAI and EY laid strong thrust on the policy imperatives needed to strengthen the overall warehousing landscape in the country and enhance ease of doing warehousing business in India. Here are snippets of key recommendations made to bolster warehousing growth along with the stimulating insights from the visionaries…

The role played by the warehousing and logistics sector during the Covid-19 pandemic is a testament to the importance of this sector in the economy. Adequate warehousing facilities coupled with an efficient logistics mechanism is the key to sustain the flow of goods and meeting consumer demand across the spectrum of the country. The critical role played by the warehousing sector has also been recognized in the National Logistics Policy (‘NLP’) and is being given due credence by the Central as well as State governments wherein NLP is expected to augment warehousing capacity and enable faster communication to take products closer to their consumption points.

With the advent of e-commerce and a push towards the revamp of supply chains across the globe in a post pandemic world, the need for adequate and quality warehousing that is sustainable and resilient is critically acknowledged more than ever. It is thus imperative that the warehousing sector be developed to cater to the requirements of a rapidly growing economy and address the need for adequate facilities to serve the increased economic activity alongside ancillary demand arising out of it. Also, the need of the hour is to evaluate the emerging trends in warehousing, adoption of technology and the policy initiatives that can help realize the true potential of the sector in India.

The warehousing sector has witnessed strong growth in the past five years growing at a CAGR of roughly 23% and is further expected to grow at 19% by FY 2026. Increase in online retail coupled with in increased consumer demand has paved the way for companies to ensure efficient availability of goods, thereby warranting availability of efficient quality warehouses, hereinafter referred to as Grade A warehouses. In addition to this, development of transportation and infrastructure facilities has resulted in increased demand of such Grade A warehouses. The entry of corporates and resultant formalization of the sector is likely to result in higher demand for such Grade A warehouses.

THE NEED OF THE HOUR

Considering India’s aim to be in top 25 rankings in LPI, significant policy thrust, and reforms are the need of the hour for improving the rankings. This shall also include policy efforts towards warehousing sector given that it forms an integral and important part of the logistics industry. Reforms and incentives that help augment the next phase of growth in warehousing are the need of the hour. To add on to this, the Logistics Ease Across Different States (‘LEADS’) report also ranks Indian states and union territories to increase competitiveness, to boost efficiency and promote healthy competition amongst them in logistics sector. This is likely to bring further efficiencies and catalyse the achievement of a US$5 trillion economy for India.

The Central Government launched NLP with an aim at introducing reforms to the logistics and warehousing sector and to introduce various policy measures to catalyse the efficiency of operations while reducing cost of logistics simultaneously. As per Ministry of Commerce & Industry, the vision of NLP is to drive economic growth and business competitiveness of the country through an integrated, seamless, efficient, reliable, green, sustainable, and cost-effective logistics network leveraging best in class technology, processes, and skilled manpower. Further, the NLP seeks to reduce the logistics cost from 16% of GDP to a global average of 8% by 2030. The NLP thus aims to promote seamless movement of goods and enhances the competitiveness of Indian industries. Further, the NLP is also cognizant of the warehousing sector as a sub-set of logistics and recognizes the importance of the sector. Focus will be on enabling adequate development of warehouses with optimal spatial planning, promotion of standards, digitization, and automation across the logistics value chain and better track and trace mechanisms.

While NLP has provided the much-needed thrust and policy focus on the logistics and warehousing sector, various states are also in the process of launching their own logistics policy within the broad contours of the NLP. To provide a fillip to the warehousing sector, various states have implemented measures that are conducive to the business environment, enables quicker set-up of facilities and aims to provide speedy resolution of grievances. At present, 13 states have put in place respective policies governing logistics and warehousing.

For India to harness the potential of warehousing sector, it is imminent that both Central Government and the State Governments must work towards removal of bottlenecks and resolution of issues hindering the growth of the sector. The launch of the NLP is that step in the right direction to ensure cooperative federalism.

KEY RECOMMENDATIONS AND ACTION PLAN

Collaborative and active participation from all stakeholders including the government is fundamental to meet and maintain demands from industry and consumers. The recommendations stated below are aimed at strengthening and improving existing warehousing facilities and serve as good guidelines for the states that are formulating logistics policies.

SIMPLIFY LAND RELATED APPROVALS - The recommendations for land approvals can be divided into two parts, namely, approvals related to government owned lands and those related to privately owned lands. The respective recommendations are as under:

  • For government owned lands, i.e., the government procures itself and allots the land for industry use. In this regard, it is recommended that such land should also be permitted to be allotted to warehousing sector treating it on par with industry.
  • For privately owned lands that are notified and on which an industry can be set up, CLU compliance shall be treated as a procedural formality only for the purpose of recording and shall be deemed to be granted within defined timeline.
  • For other type of privately-owned lands such as agricultural land that are not notified, where CLU is mandatory, the timeline for obtaining CLU must be specified. A deemed approval shall ensure timebound disposal of applications and streamline the commencement of activities on the land.

RATIONALISE PERMITS AND REGULATIONS GOVERNING WAREHOUSING - The number of permits and approvals required to build and operate a warehouse needs to be radically re-looked at with an aim to prune the redundant and irrelevant requirements. The need of the hour is to ensure we have a uniform list of approvals with standardized documentation requirements transparently available to enable industry players to acquire, build and/or operate warehouses quickly. This shall go a long way in ensuring policy certainty and attract investments in warehousing on a large scale. With the launch of NLP, the time is opportune to re-look at all permits and approvals and undertake a complete overhaul of the processes to revitalize the sector.

TIME-BOUND APPROVALS - While pruning the long list of approvals is a key ask, an equally important priority shall be to ensure time-bound approval process. Timelines must be prescribed in respective laws or policies to provide policy certainty to industry. The need of the hour is to implement a time limit with a deemed approval process if such limits are not being adhered to. A policy environment where industry is assured of timelines shall go a long way in attracting global investors and open up the sector to large scale investments needed for catalysing the next phase of growth.

CREATION OF A SINGLE WINDOW FOR ALL PERMISSIONS AND PERMITS - Alongside the rationalization of number of permits and approvals, it is equally important to have a single window mechanism at the state that is transparent, shows progress status online and enables time-bound clearances. Single window mechanism shall be done with an aim to bring all departments, agencies or authorities under a unified umbrella and remove the time and cost involved in liaison with them individually. It is imperative to create a nodal agency/ empowered group that is authorized to grant all approvals by itself and truly acts as a single window than being a liaison office merely. This shall significantly enhance the Ease of Doing Business and also reduce the time involved in the process significantly.

PERMITTING USE OF INDUSTRIAL FACILITIES FOR WAREHOUSING - Industrial facilities have a reasonably developed infrastructure and is equipped with basic facilities such as water, drainage, electricity, roads etc. At present, warehousing is either not allowed or at best, permitted with a restrictive ceiling vis-à-vis overall area.

This hinders the setting up of warehousing units in industrial areas and adversely impacts the cost of operations due to set-up in non-urban centers and at farther distance from demand hubs. With industries being one of the major demand centers for warehouses, reserving at least 15-20% of the available area for warehousing is expected to generate better synergies and unlock the potential for the sector. Adequate amendments to laws should be made to explicitly permit setting up of warehouses in industrial areas.

ALLOW GST CREDIT ON CONSTRUCTION - Being one of the most significant expenditure, denial of GST credit on construction material and services critically impacts the cash flow for the industry and leads to increased costs resulting in higher rentals. Construction of a warehouse takes anywhere between 1 to 3 years and blockage of credit on such expenditure has an ominous impact on the overall costs and returns of a project.

To spur growth and investment in warehousing sector, the government should immediately amend Section 17 (c) and (d) of Central Goods and Services Tax Act, 2017 (‘CGST Act’) and respective state GST laws to allow ITC on goods/ services procured for construction of a warehouse.

For this purpose, a proviso to the aforesaid clauses may be added to create an exception for warehousing sector. Assuming impact of 18% on costs (being median GST rate), it shall help augment the cash flows to warehousing sector and result in better returns while ensuring that cost escalations are also mitigated to a large extent.

ENABLING WAREHOUSING IN CORE VICINITY OF TIER I & II CITIES - One of the major problems faced by the market players in warehousing sector has been availability of adequate land closer to the consumer demand centers. Due to the high population density in the Tier 1 and Tier 2 cities, they tend to be the ideal demand centers. However, availability of land in Tier 1 and Tier 2 cities have been a major concern since heavy cost is incurred in case of buying such land.

In-city spaces such as Bus Depots / Terminals, metro stations, etc., can be leveraged as distribution nodes. It is also suggested that the Government consider organizing a consultation process with industry members who can collaboratively work with the government in identifying the most suitable land parcel for such investments. Sub-hubs, being smaller than MMLPs within the core vicinity of such tier I & II cities in India, may be setup to reduce lead time for demand fulfilment.

The implementation of the above recommendations shall go a long way in the development of warehousing sector, enabling capacity and scale, and help achieve the Hon’ble Prime Minister’s objective of reducing cost of logistics to global standard by 2030. This shall propel the growth of warehouses, bring in the much-needed efficiencies and remove the bottlenecks to help spur the next phase of growth that is formalized, creates job and contributes to the economic development of the country.

The time is opportune when the states are in the process of or have already launched a logistics policy in tandem with NLP. The policy focus on the logistics sector merits a deep-dive into the warehousing sector and prioritizing the implementation of solutions at Central as well as State level.

THE POLICY MAKERS

SHRI S. BHARDWAJ, Dy. Director-General, Ministry of Commerce & Industry, Government of India

A special division on logistics has been created under the Ministry of Commerce & Industry with an intent to offer an impetus to logistics in the country, to assist them and ensure the enhancement of logistics efficiency. This would ultimately result in reducing the logistics cost, which in turn, would enhance the LPI ranking of the country in the global arena. On October 13, 2021, the Government of India launched the most ambitious PM Gati Shakti Masterplan. This breakthrough initiative was launched for integrated planning of infrastructure and synchronized project implementation across all concerned Central Ministries, Departments and State Governments.

PM Gati Shakti is a transformative approach for integrated and holistic planning across concerned Ministries/ Departments to improve multimodal connectivity, and logistics efficiency and address critical gaps for the seamless movement of people, and goods, with a focus on minimising disruptions and ensuring timely completion of works. In PM Gati Shakti Master Plan, 600 layers of all different ministries of state governments are integrated on digital platform for better coordination and early resolution. Gaps are identified and taken up on priority basis regarding transportation to eliminate unnecessary congestion. Currently it is confined to government offices only. We are thinking of opening the window to private stakeholders very soon.

We also recently launched National Logistics Policy, which is an endeavour to improve the competitiveness of Indian goods, enhance economic growth and increase employment opportunities. National Logistics Policy is a comprehensive effort to address issues of high cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral, and multi-jurisdictional framework for the development of the entire logistics ecosystem.

Moreover, Unified Logistics Interface Platform (ULIP), launched as part of the ‘National Logistics Policy (NLP)’, is the promising initiative in the logistics sector that aims to bring ease of doing business in the logistics sector by simplifying the logistics processes, improving its efficiency, bringing in transparency and visibility, and reducing logistics cost & time.

With democratisation of the information, ULIP aims to enable the industry players for creating a market for revenue generation as well as abolition of monopoly and un-levelled advantage. Achieving positive results at granular and individual level will have a tremendous constructive impact on the overall logistics sector of India along with Logistics Cost percentage of GDP and enhancement in the global logistics indices of India.

NLP envisions to reduce the logistics cost on priority and enhance the logistical efficiency. In partnership with consultants, we are creating a framework to assess the logistics cost of India. Alongside, we will also assess the logistics cost that our freight forwarders have to incur when they transport cargo to different countries. Besides World Bank’s Logistics Performance Index, we are also planning to develop our own index – National Logistics Performance Index. We are engaging with the Indian freight forwarder community to communicate with their global counterparts to showcase our logistical prowess to the world.

Through all these measures, we are placing immense thrust on technology adoption. To implement this, we have also devised a comprehensive Logistics Action Plan. We are engaging with state governments and UTs to enhance Easy of Doing Business. The good news is that around 13-14 states have formulated their own State Logistics Policy to facilitate growth.

To fulfil the vision of developing a robust and cost-efficient logistics ecosystem, the logistics division of DPIIT, Ministry of Commerce & Industry also undertakes an annual “Logistics Ease Across Different States (LEADS)” survey in all States/ UTs to assess and suggest various improvements in logistics sector of the country. The LEADS survey assesses viewpoints of various users and stakeholders across value chain (Shippers, Terminal Infrastructure Service Providers, Logistics Service Providers, Transporters and Government agencies) to understand the ‘enabler’ and ‘impediments’ to logistics ecosystem in the country.

The LEADS 2022 survey report would assist PM Gati Shakti National Master Plan (PMGS-NMP) and National Logistics Policy (NLP) to perform a network mapping of logistics infrastructure, services, and regulatory environment, enabling state governments to identify and fill the gaps and achieve data-driven multimodal connectivity.

Through all these initiatives, we also want to showcase the government’s intent to augment logistical competitiveness to the global companies who are looking to do business in the country or are in the business of freight forwarding. We are organising meeting with the Indian freight forwarders. Such measures are taken to disseminate the information through these channels to their global counterparts on the measures being taken by the government to streamline supply chains. This will also enable us to achieve better rankings on the logistics index globally. We are also pushing states to take concerted measures in ironing out inefficiencies from the system and I am happy to share with you that most states have already uploaded at least 25-28 mandatory layers on the PM Gati Shakti portal suo moto. Central teams have assisted these state authorities to understand the nuances of such data and ways to work towards it. We are actively interacting with industry participants to understand their challenges and working towards removing bottlenecks.

SHRI SURESH KAKANI IAS, Managing Director, Maharashtra Industrial Township Ltd.

To start any industrial or warehousing unit, these four parameters – Land, Infrastructure, Forward & Backward Linkages and Skilled Manpower – hold prudent importance. Maharashtra already has a Logistics Policy in place, which facilitates the development of logistics parks across the state. We also have reserved land parcels for setting up of logistics parks at various industrial areas. Maharashtra has a huge land parcel owned by Maharashtra Industrial Development Corporation (MIDC). We have reserved around 30% of the land available for the establishment of logistics parks. If any additional land is required, MIDC is committed to facilitate the same. Secondly, we are placing immense thrust on developing state-of-the-art infrastructure across the state, be it road, rail, ports, or air connectivity. We have chalked out a detailed plan for developing greenfield corridors / super expressways to further enhance the infrastructure in the state.

The intent is to connect every district of the state through these corridors and reinforce mobility of goods from one place to another. We have very good rail connectivity across the state. We need intervention from the Ministry of Railways to prioritise the movement of freight from one place to another because currently the priority is on passenger traffic. We have two mega ports, and one mega port is in the development stage alongside 48 smaller ports. We have three international airports in the state with state-of-the-art cargo handling facilities.

Out of the 13 smaller airports, we are in the process of converting some of them into cargo airports to enhance the movement of goods. We are blessed with a huge network of academic institutions across the state. We have tied up with CII to assess the needs of these institutions in developing a forward-looking training module. This is aimed at honing the skills of the future talent. We are targeting to develop over 25 multimodal logistics parks and around 100 small logistics parks across the state by 2025. As far as the linkages are concerned, we have partnered with World Bank to assess the potential of every district of Maharashtra, which will give a fairly good idea to enable an all-inclusive development. Through this initiative, we are targeting tier II & III cities to ensure sustainable growth expanse. We are confident that all these factors put together will help us create an exceptional business-friendly landscape in the state. If each one of us, including the Centre, the state machinery and the industry stakeholders collaborate, the result is not only superior, but also fast paced and sustainable in the long run.

ACADEMIA & CONSULTANTS

BIPIN SAPRA, Sr Partner, Ernst & Young

We, as industry, we have with us great policy initiatives from the government’s side. PM Gati Shakti envisions to integrate the country’s logistics industry. We now have a National Logistics Policy whose importance shouldn’t be understated. With all these measures, the government’s intent is clear – to facilitate holistic growth.

Warehousing has become a key element of the National Logistics Policy. We are also witnessing a healthy competition between states to achieve higher LEADS ranking, which will ultimately enhance logistical infrastructure. To the investors, it provides a far simpler and easier access to decide on the states to set up and expand business. States need a lot of support from Warehousing Association of India (WAI) to understand industry’s partner and further assist them in removing any potential bottlenecks and devising the right roadmap on the policy landscape. Organisations like WAI are the critical connect between the industry and the government. To progress further, I believe there is a need for a national level body, which can integrate with the states to bring their policy initiatives on a single platform. They also need to work towards developing an incentive mechanism, which will further encourage investors. There also needs to be central nodal body that can streamline the documents needed for business facilitation.

I would also like to bring your focus to one of the most reformative policy measures taken by the government – GST, which has completed 5 years of its existence recently. The ‘one tax’ framework and digitalization of tax processes have triggered several seminal benefits for businesses. GST triggered an uptick in logistics efficiencies. Transportation and logistics infrastructure, such as warehousing, are witnessing increased innovation and investment.

Digitalization of compliances has made high-quality granular data available not only to the tax administration but also businesses, economists, policymakers, and other stakeholders. These are certain aspects, which can go a long way in terms of ease of doing business.

PRITAM BANERJEE, Logistics Specialist Consultant, Asian Development Bank

Multilateral Banks like ADB and other development finance institutions are working closely with the government to design programs that can bring down the overall cost of logistics related infrastructure projects. An illustrative example is National Highways Logistics Management Ltd., (NHLML) that has been tasked to develop 35 multimodal logistics parks (MMLPs) across the country in PPP model. Development Banks can work with such agencies to create a line of low-interest funding that will support in developing the super structure. This will reduce the overall development cost, the cost of acquiring a particular warehouse in an MMLP will be much lower. ADB has been working closely with the Logistics Division for the last four years supporting key initiatives, including the National Logistics Policy.

NLP is focused on some critical objectives that are central to transforming the logistics ecosystem. These include targeted interventions for the optimization of capacity utilisation of logistics infrastructure and driving greater standardisation in logistics equipment and facilities that will lead to enhanced interoperability across the logistics chain, especially between different modes.

States play a critical role in the development of modern logistics agglomeration centres such as Multi- Modal Logistics Parks and warehousing zones. The process of cooperative federalism envisaged in the NLP will help drive greater standardisation in administrative processes and enforcement across States.

The NLP also institutionalises an independent ranking of logistics performance of States in the form of the annual Logistics Ease Across Different States (LEADS). This would be a perfect nudge to States to bring greater focus on logistics related issues. Another important element in the NLP is the commitment to develop State and city specific master logistics plans. These would be critical to complement the national master plan development in the PMGS Master Plan. All of these would help improve ease of doing business on the ground.

While bringing out warehousing standards by Warehousing Association of India (WAI), in partnership with Logistics Division, is the great first step, the question remains how to ensure speedy and efficient adoption of these standards across the industry. This is where WAI has a major role to play in bringing together the entire warehousing and wider logistics fraternity and sensitize them on the potential gains of such standardization. WAI should also take the lead in discussions with GoI and financial institutions and push for fiscal incentives or reduced cost of lending for warehouse projects that adhere to these standards.

An important reform for ease of doing business in warehousing creating a genuine single window for all warehouse related approvals. ADB hopes to be able to do some good work in this area in partnership with Logistics Division and State governments. State governments need to play an active role in integrating land parcel information on the PM Gati Shakti portal so that potential investors can get the desired information under one single platform. Additionally, PSUs also own a substantial amount of land, which is perhaps under-utilised. Even major ports have huge land parcels, which are still unutilized. GoI is actively considering the monetization of such assets, and this will help create a large pool of competitively priced land for warehouse and logistics park development.

PM Gati Shakti program can efficiently manage these aspects. There are lot of infrastructure restructuring possibilities that exist in every part of the country. Proper planning, designing and sound implementation will be the key in achieving these objectives. There is urgent need to have robust methodologies to capture the true essence of logistics costs and efficiency, and not depend only on perception-based studies. In that context, India should take the lead in developing a methodology to measure our own logistics cost in partnership with the industry. This can become a global benchmark which is not just applied by us in India but is followed and implemented globally as well.

AVI DUTT, AVP, Centre for Transportation and Logistics, Indian Institute of Management Ahmedabad

The logistics ecosystem (particularly warehousing) has many stakeholders such as financing partners, insurance partners, operators, builders, architects, academia, regulators, and each playing a crucial role in the value chain and support of the ecosystem. Also, startups, SMEs and corporates have to join the ecosystem in a meaningful way together and complement each other.

I foresee a strong value proposition if scalable technology solutions (demand, supply, operations, forecasting, etc.) can be developed for warehousing in the country. startup ecosystem has not been able to join the warehousing bandwagon. There is an opportunity for the industry to collaborate with startups in a meaningful manner and the government can facilitate this development. There are a lot of non-capex technology-based products which can be designed and developed by the startups. This is how a holistic warehousing development can take shape in the country. Academia has a major role to play in streamlining these policy measures and ascertaining that they are channelized in a manner that yields a holistic and sustainable development.

The current Indian Government policy initiatives such as National Logistics Policy or PM Gati Shakti masterplan is the first step to get the ecosystem together and provide them a guideline for smooth enablement of the Indian logistics. We need to think from the perspective of logistics as a flow concept with agility, transformation at its core.

INDUSTRY VOICE

DEVAN MITRA CHENOY, Public Policy Manager, Amazon

E-Commerce captures about 30% of total warehousing space in the country, as per the Frank Knight study on warehousing, and the overall warehousing industry is growing at about 15-16% per annum. As per the EY-WAI report on warehousing this industry is set to grow by about 8-15 billion dollars over the next decade. We greatly appreciate immense thrust being laid on warehousing standardization, building quality warehouses. Today we have moved away from ‘godowns’ to ‘fulfilment centres, which is a huge revolution in itself.

Grade A warehouses today occupy about 35-40% of total warehousing space and the number is only set to grow. We witnessed warehousing growth in eight primary markets in the first ten years of development. Those were the main urban cities. But today, the demand pattern is also coming from tier II & III cities, necessitating a holistic development of warehousing in those cities as well. I am excited to witness the growth that unfolds on the back of e-commerce boom. ULIP is first-of-its-kind initiative that has the potential to be a great WIN for India. It really amazes me as the citizen of India to see the vision of the governing authorities to bring to light such path-breaking policy measures. The biggest caveat of this policy is that it has put Logistics at the fulcrum of the economy. It has changed the mindset of people towards logistics industry. i-GOT platform is another great tool that NLP has launched.

We all must understand that supply chain needs to be resilient, and it needs to be moving continuously. The governing authorities must develop City Logistics Plan to avoid any supply chain disturbances. We must need to lay emphasis on in-city warehousing and proper land availability needs to be looked into. We also really need to push multimodal logistics to cater to the length and breadth of the country in a seamless and cost-effective manner.

PRASANTA BISWAL, Advisor on Public Policy, Regulatory & Government Affairs, Horizon Industrial Parks

When we talk about bringing down logistics cost to single digit, with global average being 8%, a 6% margin reduction from we stand today at about 14%, entails 300 billion dollars saving, considering the vision of achieving 5 trillion-dollar economy by 2025. It further entails 6% saving for the Indian economy, which translates into 1.5% growth in the GDP. We have witnessed humungous progress being made by the warehousing industry in the country in the recent years. We have reached 300 million sqft and slowly advancing towards becoming an organised sector. But I want to bring in a different perspective here… what if the warehousing industry fails to deliver this?

While there are incredible opportunities waiting to be tapped, there are immense bottlenecks as well. As developer, we are facing huge challenge in terms of land acquisition. Warehousing is a low margin business.

The complexity surmounts the moment private equities start investing into it and expects a double-digit profit. The problem aggravates when we are talking about reducing logistics cost as it directly involves reducing warehousing input costs, which can be in the form of taxation, regulation, so on and so forth. Land cost comes through time where time value money is of essence.

Availability, accessibility, and affordability of land is a big maze we have to deal with. Newer policy implementation can only happen we start operating. Imagine one year delay in land acquisition for a Rs1000 crore project can have a huge strain on operational margins (due to the high carrying cost about Rs100 crore at 10% cost of funding). We request the Central governing bodies to enable faster access of land to developers. This is one area where the government and the Warehousing Association of India needs to work closely and aggressively. Before this, we can’t really achieve the target of cost reduction.

Additionally, policy formulation is one thing. What we really need to look at is the effective implementation of that policy by respective departments and creating awareness among the industry on the accrued benefits of the same. We need to imbibe policy implementation in true spirit so that we really don’t have to go from pillar to post for every single approval. In my opinion, single window only opens multiple doors. For us, there is practically no ‘single window clearance’.

Moreover, I believe we need to promote multi-tier warehousing, which a big miss today. Gati Shakti is all about bringing speed in the development of necessary infrastructure. We must work on these measures at speed to harness potent benefits. It is heartening to see the government’s increased engagement with the private sector and that it is taking efforts to understand the industry’s pain points. Government can also look into the tax implications so that there is greater revenue generation. We don’t just need to look at reducing logistics cost, we need to also look at lowering input cost or taxation. This is my take on the whole expanse of warehousing in the country.

LOKANATHAN NADAR, SVP & National Head – Corporate Affairs, Welspun One Logistics Parks

Every element of the National Logistics Policy has a special feature; it has offered us the flexibility to make and implement amendments based on industry. Moreover, it is highly stakeholder-friendly and simplified.

There are tremendous business opportunities waiting to be tapped from initiatives such as NLP and PM Gati Shakti Masterplan. The fact that it is talked about every corner of the country itself reflects its ability to reach the last mile. Industry stakeholders are enthusiastic about reaping the tangible benefits and supporting the government’s endeavour to bring logistics to the spotlight. An impeccable integration has been the biggest plus of this policy. We are bullish about the unfolding possibilities coming our way.

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