Govt trying to bring logistics cost down to around 12 pc

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SME Times News Bureau | 06 Nov, 2017
With logistics cost in India alarmingly high, the government is working towards lowering it by a third by developing coastal shipping and inland waterways as alternative modes of transport, Union Shipping Minister Nitin Gadkari said on Saturday.

In his address at "World Food India 2017" in New Delhi, he said the logistics cost in India was as high as 18 percent compared to China where it was between 8 and 10 percent.

"We are trying to bring this cost down to around 12 percent which would make Indian goods more competitive in the international market," Gadkari said, adding that the government was prioritising coastal transport and inland waterways compared to road and rail mode as costs were significantly lower for the former.

"For every Rs 10 of transportation cost by road, it is Rs 6 for railways and only Rs 1 for waterways. That means you would be able to transport goods spending only 10 percent of the current cost," said Gadkari, who is also the Road Transport and Highways Minister.

"There are 111 rivers which we have decided to develop as inland waterways. Out of these, work has already started on 10 rivers," he said. "These waterways will significantly reduce logistics cost."

Even as the government was focusing on developing waterways, work was simultaneously being done at a fast pace to bring down logistics cost on roads as well, the minister said.

"We are going for electronic toll collection. Currently, Delhi to Mumbai takes 28 hours but soon, it will take only 18 hours because we are abolishing all state barriers. Now we will have e-toll collection and no one will be stopped for paying the toll tax, which will be charged automatically.

"This will lead to saving of 8-10 hours between Delhi and Mumbai," Gadkari said.

"Our focus is also on logistics parks. We have already acquired land for 32 such parks and all major cities will have them," he said.

Gadkari added that all logistics parks would be located outside the city where big trucks would arrive with goods, after which smaller vehicles would take those goods to different parts of the city based on requirement.

He said in the road sector alone, his target was to bring in investment worth Rs 25 lakh-crore during his tenure.

"We have already signed contracts worth over Rs 6 lakh-crore in road sector. Under Bharatmala project, we are expecting Rs 8-lakh-crore investment.

"I am confident that in two years, we will meet that target," Gadkari said.