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A change of government in India has brought about a new sense of optimism amongst Indian freight forwarders that finally the logistics headaches brought about by the country’s creaking infrastructure and burdensome bureaucracy might begin to be resolved.

Following the election of Narendra Modi last May, when his BJP party won an outright majority in Parliament for the first time since 1984, Indian forwarders interviewed at the WAC conference in Hong Kong this week were adamant that long overdue reforms would be enacted.

“This time the government has an overwhelming majority in parliament – they are getting things done because they realise how much potential the country has, but if can’t achieve it without business being able to reduce the costs,” SL Sharma, president of the Air Cargo Agents Association of India (ACAAI), told The Loadstar.

Top of the list was is the implementation of a federal goods and services tax (GST), which will replace indirect taxes levied by both individual states’ level of duty on goods passing across state borders, which have been a long-standing impediment to the development of country-wide supply chains and caused extra cost to manufacturers.

“I am 100% sure that the GST will be implemented on 1 April 2016,” Mr Sharma said.

“The benefits are so obvious – it is estimated that it would lead to a 2-3% increase in India’s GDP.”

At the same time, it would appear that the government is set to green light an ACAAI proposal that air freight stations be built close to manufacturing centres, allow ULDs to be stuffed away from airports, which continue to suffer heavy congestion.

He said that the ministry of transport has requested that ACAAI provide it with a list of where it wanted the new locations to be.

“Having stations near to the factories will mean we can deliver ULDs straight to the airport, which will really help clear up the congestion that you routinely see in Delhi, Mumbai and Chennai and will also cut costs in half, because we won’t be paying further fees for operations inside airports.”

He said that the chief beneficiaries would likely be the second tier cities in industrial belts that are springing up in states such as Gujarat, but predicted that it would be about a year before the first station opened as applications still needed to be filed.

“But the important thing is that the perception of business has completely changed since this government was elected – I cannot remember a time when I felt as optimistic about India’s prospects,” he said.

Delhi-headquartered Atlas Shipping’s chairman and managing director Sushil Gupta argued that a similar determination to build new transport infrastructure had also boosted forwarders’ confidence.

“I am hopeful that the new government will deliver what it has promised, and it is looking to acquire foreign expertise to develop our ports, roads, rail and even river transport, such as developing barge service on the river Ganges.

“India has a huge potential, but we do need foreign expertise – the capacity hasn’t increased and we need this to improve,” he added, pointing to a recent visit by US president Barak Obama where a target was set of increasing the annual trade between the two countries from $100bn per year to $500bn.

“We know that it won’t happen overnight, but we should start seeing the results of this in two-to-three years.”

Another key project is the commitment to develop privately-operated rail freight corridors that are separated from the passenger network.

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