News / Indian government looks to bolster economy with 100-terminal investment

Credit Adani Group

India’s inland logistics and warehousing industry is poised for a big take-off with the government declaring multimodal connectivity as a critical area to attract investors.

As part of fiscal year 2022-23 budget proposals presented today, Indian finance minister Nirmala Sitharaman said 100 new cargo terminals would be developed in the country over the next three years.

“The Gati Shakti – a national programme for multimodal connectivity – aims to bring 16 ministries, including railways and roadways, together for integrated planning and co-ordinated implementation of infrastructure connectivity projects,” said Ms Sitharaman.

The investment strategy seems to revolve around creating hub-and-spoke terminal networks for swifter movement of goods across the country; however, specific project details were not available.

Industry representatives welcomed the initiative, saying multimodal logistics connectivity could help fix many of the pain points for the export-import trading community.

“The development of multimodal logistics parks will further spur economic growth,” said VS Parthasarathy, vice chairman of Allcargo Logistics.  “The unified logistics interface platform is a progressive move in tune with the time to enable efficient movement of goods, cut down logistics costs and better inventory management.”

Vivek Chopra, acting CEO of the cluster India and Indian Subcontinent at DB Schenker, told The Loadstar the industry would see positive momentum from the government’s move and that the opening of more cargo terminals would boost logistics efficiency.

“As India gears up and prepares for a stronger and resilient economy, with considerable investments in the infrastructure and increased manufacturing, the logistics sector as a service provider will be the critical enabler,” said Prem Kishan Gupta, chairman and MD of Gateway Distriparks.

A Sakthivel, president of the Federation of Indian Export Organisations, saID: “The setting up of 100 cargo terminals will facilitate export-import trade a lot as logistics challenges today are the biggest stumbling blocks.”

Freight forwarders also welcomed the budget announcement on new logistics facilities as supply chain stakeholders navigate serious challenges.  Sanjay Bhatia, CEO AND co-founder of digital forwarder Freightwalla, said: “The programme is a step in the right direction to strengthen our country’s supply-chain ecosystem by integrating multiple logistics nodes and ensuring seamless multimodal connectivity and efficiency.”

The move escalates 2017 government policy calling on industry stakeholders to switch from a point-to-point transport system to a hub-and-spoke model for the movement of domestic freight on lower-volume corridors.