Logistic Hubs/ ICD/CFS/ Free Trade Warehousing Zones Centre for Urban Research
Logistic Parks/ Transshipment Zones
As part of the development of Western Dedicated Freight Corridor (DFC) between Delhi and Mumbai, Indian Railways have proposed development of Freight Logistic Parks at six locations along the DFC to enhance rail based traffic along the DFC. These locations include:
(i) Navi Mumbai
(ii) Vapi (Gujarat)
(iii) Ahmedabad (Gujarat)
(iv) Gandhidham (Gujarat)
(v) Jaipur (Rajasthan)
(vi) National Capital Region of Delhi
These parks are proposed to be executed either as joint venture with Railways and respective state governments where Railways will offer land. Ministry of Railways has issued licenses to a number of private operators for running container trains on the same lines as CONCOR. These private operators are allowed to set up logistic parks at different locations along the corridor, and also induct their own wagon fleets to carry the containers.
Logistic Parks/ Hubs in Gujarat
Further to the Ministry of Railways' directives to respective state governments to identify suitable locations in consultation with private entrepreneurs for developing logistic hubs along the Dedicated Freight Corridor, Government of Gujarat has identified six suitable locations, compared to three locations as identified by the Ministry of Railways, for setting up Logistic Hubs in state. These short-listed locations include:
. Ahmedabad and Gandhidham, as recommended by Ministry of Railways
. Dahej, Hazira, Palanpur and Surendra Nagar in place of Vapi, which was recommended by the Ministry of Railways.
Modern Rail Terminal at Boraki, Greater Noida
Government of Uttar Pradesh has proposed development of Boraki Railway Station as the major passenger and goods based rail terminal with state-of-the-art infrastructure through public private partnership. It is expected to serve as convenient location for evacuation of goods from Delhi/Ghaziabad region and help in decongesting the rail terminals. Boraki Railway Station is close to the proposed 2500 Acre SEZ, 1000 Acre Handicraft SEZ, Container Depot at Dadri. Moreover, Boraki Rail Terminal is proposed to be connected to the Container Depot at Tughlakabad with a new alignment that connects with Noida as well. The state government has already received in-principle approval from the Ministry of Railways.
Logistic Parks/ Hubs in DMIC Region of Madhya Pradesh
In Madhya Pradesh, the state government, as part of its vision framework for the sector, had short listed various locations for developing logistics & warehousing infrastructure in the state based on the existing road and rail connectivity, expected demand and availability of adequate land for developing such facilities. The identified locations in the DMIC Region include:
. Ratlam, Jhabua and Dewas, as most suitable locations for immediate development
. Neemach and Shajapur, as potential locations for future development
Inland Container Depot/ Container Freight Station
Inland Container Depots (ICD)/ Container Freight Stations (CFS) are common user facilities offering services for handling and temporary storage of import/export laden and empty containers carried under customs control and with customs and other agencies competent to clear goods for warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export. These facilities also allow transshipment of cargo. ICD/CFS shall have rail siding, container yard, warehousing facilities and container inspection areas.
An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports and CFS, on the other hand, is an off dock facility located near the servicing ports which helps in decongesting the port by shifting cargo and customs related activities outside the port area.
The terminal network of the Container Corporation of India (CONCOR), the agency of Indian Railways and responsible for setting up ICD/CFS in India includes following locations in the project influence area of DMIC States and in the vicinity of Ports along the Western Coast.
Proposed Initiatives of Haryana State Government
As part of development of the proposed Western Peripheral Expressway (Kundli- Manesar-Palwal Expressway), the Government of Haryana has proposed development of Dry Port in the vicinity of Palwal over an area of 2 Sqkm (200 Ha). In addition, the state government is also contemplating setting up Logistics Park at Rewari/ Bawal to cater to the region's requirements.
Existing Initiatives of Rajasthan State Government
In addition to Kota, Jaipur and Jodhpur, Government of Rajasthan had set up Dry Ports/ Logistic facilities at Bhiwadi, Bhilwara to cater to the regions' logistic requirements.
Custom Bonded Warehouses
The concept of Custom Bonded Warehousing has been promoted with a view to facilitate deferred payment of custom duty to encourage entrepreneurs and export oriented units to carry out their operations with least investment. These bonded Warehouses are located all over the country at places well - connected with the port towns for smooth movement of goods to and from the discharge points. The Central Warehousing Corporation of India (CWC) operates 95 Custom Bonded Warehouses with a total capacity of 0.7 Million Tonnes. It is important to note that DMIC States constitute 41 Custom Bonded Warehouses catering to a total capacity of 0.329 Million Tonnes. About 99% of capacities of custom bonded warehouses in DMIC States are located within the project influence area.
Free Trade Warehousing Zones
Government of India, through its Foreign Trade Policy 2004, had announced development of Free Trade Warehousing Zones (FTWZs) to increase the percentage share of global merchandise trade in India.
Services Offered in FTWZ
. Warehousing space on lease
- Space for warehousing on lease basis and even space to construct the warehouses, to be leased out and ready to use facility customized as per the storage requirement of the specific products.
- Basic infrastructure facilities like power, water, and sewerage drainage system.
. 24 hours customs clearance
The customs office placed inside the FTWZ with customs clearance facility available to FTWZ users all round the clock.
. Freight Management support
The FTWZs are also expected to provide freight services to the FTWZ users in terms of transportation means to and from the Zone.
. Common equipments sub-lease
The FTWZ would also make available general facilities for effective storage and movement of cargo through equipments such as counter balance fork-lifts, cranes and grabs, stackers, push carts, picking trolleys and bins, shelves and storage bins, strapping and electronic scales.
. Activities that can be undertaken inside FTWZ:
Manufacturing facilities will not be allowed within the FTWZ. However, activities such as packing, de-stuffing, knitting, splitting and other activities required for storage purposes will be allowed within the FTWZ.
. Support facilities and efficient management
Support facilities such as banking, insurance etc. would be available for captive utilization within the FTWZ.
. Delivery time
With customs clearance procedures being simplified, the delivery time would be significantly reduced.
. Single product storage facilities
FTWZ would provide users storage facilities that would meet the specific requirements of each product category, thereby ensuring a safer and more efficient environment for the storage of the products Benefits with FTWZ
Deferred Duty Benefits
Importers of goods into India have to pay significant duties at the time the goods are brought into the country. For a company having its operations within a FTWZ, the custom duty would be payable only at the time the commodities are sold into the Domestic Tariff Area (DTA).
. Hubbing Opportunities
Under efficient infrastructure and superior operational dynamics, companies can utilize the FTWZ as a hub for its operations and services to other countries and regions.
Multi national vendors can be located within the FTWZ to facilitate imports whereby the items imported from other countries can be stored without paying duties till the time they are actually moved into the Domestic Tariff Area (DTA). Similarly, domestic units located within the FTWZ can facilitate exports.
. Income & Service tax benefits
The zone would provide exemptions on income tax as highlighted in section 80IA of the income tax act.
Companies providing services from within the zone (such as logistics companies, warehouse/ storage providers, etc.) are exempt from payment of service tax, thereby reducing the logistics costs to users within the zone.
. Excise Duty Exemptions
All capital goods, spares, DG sets, packing materials etc. sourced from the domestic market for utilization within the zone, is exempt from excise duty, thereby providing significant savings
. Benefit to Bulk Commodities such as fertilizers, dry chemicals, etc
Since the FTWZs would be in close proximity to the ports, transportation of bulk commodities can be made easier by delaying the requirements such as bagging and containerizing them.
. Benefit to Export Commodities
Companies dealing in exports can receive their bills of lading on entering the FTWZ as all the goods entering the FTWZ would be deemed as exports.
. Benefit to Trading Exchanges
FTWZ can facilitate establishment of trading exchanges such as London Metal Exchange and MCX wherein global traders can use the FTWZ as a hub for distribution thereby reducing the cost of sourcing as the products would be physically available within the country
Locations of FTWZ
Free Trade Warehousing Zones are proposed to be located in six locations across India. These include, Greater NOIDA, Kandla, Mumbai, Cochin, Ennore, Haldia.
It is important to note that amongst the locations selected for the FTWZs, except for Greater Noida, the remaining five are ports. This is expected to provide convenient and effective movement of goods through the sea, rail or road by offering the users of the FTWZ a superior infrastructure enabling efficiencies.
DMIC influence area has three FTWZs as Greater NOIDA, Kandla, JN Port, and Mumbai.
Rail side Warehousing Complexes
In order to augment the utilization of railway transportation system and facilitate cost-effective and efficient operation for freight distribution, the Central Warehousing Corporation of India (CWC) in association with Ministry of Railways have evolved the concept of Rail side warehousing facilities so as to ensure value added services viz. provision of total logistics solutions, avoiding of multiple handling of goods, curtailing of handling cost and offering hassle free efficient operation, to the users of rail transport system. Accordingly, the CWC and Railway Ministry have identified 22 strategic locations for development rail side warehousing complexes.
Within the Project Influence Area of DMIC, Rail side Warehousing Complexes are proposed at:
. Shakur Basti and Ghaziabad in Northern Railway Region, the NCR of Delhi
. Saswad Road-Pune and Nashik Road in Central Railway Region, Maharashtra
. Kandla in Western Railway Region, Gujarat.
It may be noted that Rail side Warehousing Complexes are the facilities similar to 'Logistic Parks' that are envisaged by the Ministry of Railways along the Dedicated Freight Corridor between Delhi and Mumbai, except that Logistic Parks would be developed at new locations along the DFC with rail terminals whereas rail side warehousing complexes would be developed at the existing railway station by upgrading the requisite infrastructure.
(ii) Vapi (Gujarat)
(iii) Ahmedabad (Gujarat)
(iv) Gandhidham (Gujarat)
(v) Jaipur (Rajasthan)
(vi) National Capital Region of Delhi
These parks are proposed to be executed either as joint venture with Railways and respective state governments where Railways will offer land. Ministry of Railways has issued licenses to a number of private operators for running container trains on the same lines as CONCOR. These private operators are allowed to set up logistic parks at different locations along the corridor, and also induct their own wagon fleets to carry the containers.
Logistic Parks/ Hubs in Gujarat
Further to the Ministry of Railways' directives to respective state governments to identify suitable locations in consultation with private entrepreneurs for developing logistic hubs along the Dedicated Freight Corridor, Government of Gujarat has identified six suitable locations, compared to three locations as identified by the Ministry of Railways, for setting up Logistic Hubs in state. These short-listed locations include:
. Ahmedabad and Gandhidham, as recommended by Ministry of Railways
. Dahej, Hazira, Palanpur and Surendra Nagar in place of Vapi, which was recommended by the Ministry of Railways.
Modern Rail Terminal at Boraki, Greater Noida
Government of Uttar Pradesh has proposed development of Boraki Railway Station as the major passenger and goods based rail terminal with state-of-the-art infrastructure through public private partnership. It is expected to serve as convenient location for evacuation of goods from Delhi/Ghaziabad region and help in decongesting the rail terminals. Boraki Railway Station is close to the proposed 2500 Acre SEZ, 1000 Acre Handicraft SEZ, Container Depot at Dadri. Moreover, Boraki Rail Terminal is proposed to be connected to the Container Depot at Tughlakabad with a new alignment that connects with Noida as well. The state government has already received in-principle approval from the Ministry of Railways.
Logistic Parks/ Hubs in DMIC Region of Madhya Pradesh
In Madhya Pradesh, the state government, as part of its vision framework for the sector, had short listed various locations for developing logistics & warehousing infrastructure in the state based on the existing road and rail connectivity, expected demand and availability of adequate land for developing such facilities. The identified locations in the DMIC Region include:
. Ratlam, Jhabua and Dewas, as most suitable locations for immediate development
. Neemach and Shajapur, as potential locations for future development
Inland Container Depot/ Container Freight Station
Inland Container Depots (ICD)/ Container Freight Stations (CFS) are common user facilities offering services for handling and temporary storage of import/export laden and empty containers carried under customs control and with customs and other agencies competent to clear goods for warehousing, temporary admissions, re-export, temporary storage for onward transit and outright export. These facilities also allow transshipment of cargo. ICD/CFS shall have rail siding, container yard, warehousing facilities and container inspection areas.
An ICD is generally located in the interiors (outside the port towns) of the country away from the servicing ports and CFS, on the other hand, is an off dock facility located near the servicing ports which helps in decongesting the port by shifting cargo and customs related activities outside the port area.
| Exports | Imports |
| Receipt of export cargo | Movement of Import containers from the port |
| In-House customs examination | De-stuffing of LCL and FCL containers |
| Export cargo aggregation and storage | Customs Examination |
| Pre-shipment Disinfestations of containers as well as of export cargo. | Bonded Warehousing facilities |
| Cargo stuffing under custom supervision |
The terminal network of the Container Corporation of India (CONCOR), the agency of Indian Railways and responsible for setting up ICD/CFS in India includes following locations in the project influence area of DMIC States and in the vicinity of Ports along the Western Coast.
Proposed Initiatives of Haryana State Government
As part of development of the proposed Western Peripheral Expressway (Kundli- Manesar-Palwal Expressway), the Government of Haryana has proposed development of Dry Port in the vicinity of Palwal over an area of 2 Sqkm (200 Ha). In addition, the state government is also contemplating setting up Logistics Park at Rewari/ Bawal to cater to the region's requirements.
Existing Initiatives of Rajasthan State Government
In addition to Kota, Jaipur and Jodhpur, Government of Rajasthan had set up Dry Ports/ Logistic facilities at Bhiwadi, Bhilwara to cater to the regions' logistic requirements.
Custom Bonded Warehouses
The concept of Custom Bonded Warehousing has been promoted with a view to facilitate deferred payment of custom duty to encourage entrepreneurs and export oriented units to carry out their operations with least investment. These bonded Warehouses are located all over the country at places well - connected with the port towns for smooth movement of goods to and from the discharge points. The Central Warehousing Corporation of India (CWC) operates 95 Custom Bonded Warehouses with a total capacity of 0.7 Million Tonnes. It is important to note that DMIC States constitute 41 Custom Bonded Warehouses catering to a total capacity of 0.329 Million Tonnes. About 99% of capacities of custom bonded warehouses in DMIC States are located within the project influence area.
Free Trade Warehousing Zones
Government of India, through its Foreign Trade Policy 2004, had announced development of Free Trade Warehousing Zones (FTWZs) to increase the percentage share of global merchandise trade in India.
Services Offered in FTWZ
. Warehousing space on lease
- Space for warehousing on lease basis and even space to construct the warehouses, to be leased out and ready to use facility customized as per the storage requirement of the specific products.
- Basic infrastructure facilities like power, water, and sewerage drainage system.
. 24 hours customs clearance
The customs office placed inside the FTWZ with customs clearance facility available to FTWZ users all round the clock.
. Freight Management support
The FTWZs are also expected to provide freight services to the FTWZ users in terms of transportation means to and from the Zone.
. Common equipments sub-lease
The FTWZ would also make available general facilities for effective storage and movement of cargo through equipments such as counter balance fork-lifts, cranes and grabs, stackers, push carts, picking trolleys and bins, shelves and storage bins, strapping and electronic scales.
. Activities that can be undertaken inside FTWZ:
Manufacturing facilities will not be allowed within the FTWZ. However, activities such as packing, de-stuffing, knitting, splitting and other activities required for storage purposes will be allowed within the FTWZ.
. Support facilities and efficient management
Support facilities such as banking, insurance etc. would be available for captive utilization within the FTWZ.
. Delivery time
With customs clearance procedures being simplified, the delivery time would be significantly reduced.
. Single product storage facilities
FTWZ would provide users storage facilities that would meet the specific requirements of each product category, thereby ensuring a safer and more efficient environment for the storage of the products Benefits with FTWZ
Deferred Duty Benefits
Importers of goods into India have to pay significant duties at the time the goods are brought into the country. For a company having its operations within a FTWZ, the custom duty would be payable only at the time the commodities are sold into the Domestic Tariff Area (DTA).
. Hubbing Opportunities
Under efficient infrastructure and superior operational dynamics, companies can utilize the FTWZ as a hub for its operations and services to other countries and regions.
Multi national vendors can be located within the FTWZ to facilitate imports whereby the items imported from other countries can be stored without paying duties till the time they are actually moved into the Domestic Tariff Area (DTA). Similarly, domestic units located within the FTWZ can facilitate exports.
. Income & Service tax benefits
The zone would provide exemptions on income tax as highlighted in section 80IA of the income tax act.
Companies providing services from within the zone (such as logistics companies, warehouse/ storage providers, etc.) are exempt from payment of service tax, thereby reducing the logistics costs to users within the zone.
. Excise Duty Exemptions
All capital goods, spares, DG sets, packing materials etc. sourced from the domestic market for utilization within the zone, is exempt from excise duty, thereby providing significant savings
. Benefit to Bulk Commodities such as fertilizers, dry chemicals, etc
Since the FTWZs would be in close proximity to the ports, transportation of bulk commodities can be made easier by delaying the requirements such as bagging and containerizing them.
. Benefit to Export Commodities
Companies dealing in exports can receive their bills of lading on entering the FTWZ as all the goods entering the FTWZ would be deemed as exports.
. Benefit to Trading Exchanges
FTWZ can facilitate establishment of trading exchanges such as London Metal Exchange and MCX wherein global traders can use the FTWZ as a hub for distribution thereby reducing the cost of sourcing as the products would be physically available within the country
Locations of FTWZ
Free Trade Warehousing Zones are proposed to be located in six locations across India. These include, Greater NOIDA, Kandla, Mumbai, Cochin, Ennore, Haldia.
It is important to note that amongst the locations selected for the FTWZs, except for Greater Noida, the remaining five are ports. This is expected to provide convenient and effective movement of goods through the sea, rail or road by offering the users of the FTWZ a superior infrastructure enabling efficiencies.
DMIC influence area has three FTWZs as Greater NOIDA, Kandla, JN Port, and Mumbai.
Rail side Warehousing Complexes
In order to augment the utilization of railway transportation system and facilitate cost-effective and efficient operation for freight distribution, the Central Warehousing Corporation of India (CWC) in association with Ministry of Railways have evolved the concept of Rail side warehousing facilities so as to ensure value added services viz. provision of total logistics solutions, avoiding of multiple handling of goods, curtailing of handling cost and offering hassle free efficient operation, to the users of rail transport system. Accordingly, the CWC and Railway Ministry have identified 22 strategic locations for development rail side warehousing complexes.
Within the Project Influence Area of DMIC, Rail side Warehousing Complexes are proposed at:
. Shakur Basti and Ghaziabad in Northern Railway Region, the NCR of Delhi
. Saswad Road-Pune and Nashik Road in Central Railway Region, Maharashtra
. Kandla in Western Railway Region, Gujarat.
It may be noted that Rail side Warehousing Complexes are the facilities similar to 'Logistic Parks' that are envisaged by the Ministry of Railways along the Dedicated Freight Corridor between Delhi and Mumbai, except that Logistic Parks would be developed at new locations along the DFC with rail terminals whereas rail side warehousing complexes would be developed at the existing railway station by upgrading the requisite infrastructure.
