The $107-billion logistics industry in the country is pitching for “industry” sector status for access to cheaper credit, land benefits and the freedom to frame labour laws.
Road transporters, freight forwarders and scores of companies in the business of goods transport and storage had approached the Commerce Ministry recently in this regard, R Dinesh, Managing Director of TVS Logistics Services Ltd, told reporters at a logistics summit here.
The demand comes as the Goods and Services Tax regime is approaching, with the Centre and States working out the revenue losses in its implementation. The new structure is expected to rationalise the indirect tax system and result in hassle-free transport of goods between States. E-commerce emerging a major business has enthused this sector, but the profitability is not visible as yet. “While 40-45 per cent of logistical operations are outsourced in the West, in India it is still at 7-8 per cent,” said Dinesh.
Anshuman Singh, Managing Director of Future Group-promoted Future Supply Chain Solutions, said most e-commerce players do not outsource logistics. “Many of them are making losses, and they cannot fork it out to another company to run it for them,” he said. Over the last five years, e-commerce shipments have doubled, but this has yielded not much business for standalone logistics players.
Though coastal shipping along the country’s borders has started for coal and cement, it has still not taken off for other commodities, said Dinesh.