The logistics sector in India is gearing up for what the Union Budget 2024 promises a transformation. With significant developments in the recent Interim Budget, industry stakeholders are optimistic but vocal about the areas that still need attention to move India towards a logistics revolution.

In the Interim Budget presented recently, Finance Minister Nirmala Sitharaman announced the implementation of three major Economic Railway Corridor programs to facilitate faster movement of freight and bring down logistics costs for India. can be reduced.

Going forward, experts now share their views on the foundation laid in the last few budgets, which include significant investments to establish last-mile and first-mile connectivity for key transport infrastructure projects. What are logistics industry experts expecting in the upcoming budget?

Further support to MSMEs in the sector

Gregory Guba Bley, Managing Director, UPS India commented that this budget should continue its commitment to the logistics sector, especially MSMEs.

“Providing timely access to finance, advanced technologies, and relevant training is essential for these businesses to compete globally. Additionally, logistics companies are seeking to reduce regulatory costs. Government incentives It should promote the adoption of modern technology in the logistics sector which not only increases logistics efficiency but also contributes to India’s logistics performance index,” he said.

Multi-modal connectivity and heavy investment

Kami Viswanathan, President, FedEx, MEISA anticipates changes in the upcoming budget. “We expect to see significant investment in multimodal connectivity across the industry, including the addition of advanced air cargo terminals and infrastructure to create seamless trade corridors, the Prime Minister’s Mobility Plan and the National According to the logistics policy,”

“We expect to continue to focus on trade facilitation, streamlining and digitizing the clearance process, reducing delays and increasing the efficiency of cargo movement,” he added.

Steps to reduce logistics cost

Current logistics costs in India are high compared to other regions. This hampers business competitiveness and ease of doing business. Thus, the demand for measures to reduce logistics cost is the biggest demand of logistics players.

Highlighting the same, Siros, head of the logistics division, said, “The main objective is to reduce logistics cost from 14 per cent of GDP to 8-10 per cent of GDP. Faster TAT and no baggage. Development of infrastructure for a barrier movement should be addressed. With its extensive coastline and inland waterways, India has great potential to promote multimodal logistics and integrate local and global supply chains. Further, reduction of GST rates on HCV and MCV for EV and alternative fuels would be beneficial to encourage the industry to migrate to cleaner fuels.

Key Expectations from the Budget:

  1. Infrastructure investment:
    • Significant investment in transport infrastructure projects.
    • Development of modern air cargo terminals.
    • Enhance multi-modal connectivity to create seamless trade corridors.
  2. Support for MSMEs:
    • Provision of timely access to finance.
    • Access to the latest technologies and relevant training programs.
  3. Regulatory and Tax Reforms:
    • Reduced regulatory costs for logistics companies.
    • Lower rate of GST on HCV and MCV for EV and alternative fuels.
  4. Technology Adoption:
    • Incentives for adoption of modern technology in the logistics sector.
    • Focus on digitizing the clearance process to reduce delays and increase efficiency.
  5. Durability and Performance:
    • Steps to create a more efficient and sustainable logistics ecosystem.
    • Support for multimodal logistics to take advantage of India’s coastline and inland waterways.

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