With growing sectors like automotive components, pharmaceuticals, cement, textiles, FMCG and e-commerce, there was the need of the healthy and efficient logistics sector. India rank 35 out of 160 in the logistics performance index. ( This is quite low). Hence GOI recently granted infrastructure status to the logistics.
Major benefits attached by granting infra. Status with the logistics sector are as follows:
- Availability of easy credits to the companies operating within these segments. Now long-term credit from banks and other Financial institutes can give credit to these companies.
- It will also help to attract foreign investment.
- More funds and capital will make sector more efficient and thus help to reduce per unit cost incurred in logistics. This will have cascading effect on improving competitiveness.
- It will also help to prevent the damages of Perishable items in the agriculture sector by having a healthy cold chain supply chain.
Major Impediments:
- Road Infra in bad shape.
- Banks lack of lending capacity. Facing NPA issues.
- Flight of capital due to Quantitative easing.