The Finance Ministry on Monday said that the logistics sector has been granted infrastructure status, a move that will help the industry raise funds at competitive rates and boost India’s trade.
The Finance Ministry on Monday said that the logistics sector has been granted infrastructure status, a move that will help the industry raise funds at competitive rates and boost India’s trade. The Finance Ministry, in a series of tweets said, that the infrastructure status will make the logistics sector to avail infrastructure lending at easier terms with enhanced limits, will get access to larger amounts of funds as External Commercial Borrowings (ECB), longer tenor funds from insurance companies and pension funds and be eligible to borrow from IIFCL.
“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,” the Finance Ministry said in a statement.
The inclusion of “Logistics Sector” in the Harmonized Master List of Infrastructure Sub-sectors was considered in the 14th Institutional Mechanism Meeting on 10th November, 2017. It was recommended by the Institutional Mechanism & subsequently approved by the FM Shri @arunjaitley
— Ministry of Finance (@FinMinIndia) November 20, 2017
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 the 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.
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.