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UP plans to build modern logistics ecosystem

2022-12-28

To boost exports, Uttar Pradesh, which aims to become a trillion-dollar economy by 2027, will build a network of dry ports and freight container stations. In collaboration with private players, the state intends to create a modern logistics ecosystem.

A dry port is an inland intermodal port that is directly linked to a seaport by roads or railways to allow for faster export cargo movement. The state will expedite land allotments for logistics parks and offer a slew of subsidies and incentives to entice private investment under the UP Warehousing and Logistics Policy 2022.

The state will assist the private sector in developing infrastructure for storage facilities, cold chains, multi-modal parks, container depots, and container freight stations in the state.

"The fresh policy has been framed with an objective of developing a strong logistics ecosystem and fostering an international business and investment environment to achieve the trillion-dollar economy vision," a government official said. In three years, the state aims to boost merchandise exports from Rs 1.56 trillion to almost Rs 3 trillion.

The Varanasi-Haldia inland waterway will also be used, according to the government, to spur exports.

The state intends to increase shipments of farm and dairy products, in addition to those from micro, small, and medium-sized enterprises (MSME), by taking advantage of the comparatively less expensive cargo movement from Varanasi via the waterway to the seaport in West Bengal.

The Inland Waterways Authority of India (IWAI) manages the Varanasi-Haldia inland waterway. In order to support passenger and cargo movements, the UP government is currently looking to develop additional intrastate inland waterway systems.

As part of the new UP logistics policy, the state will also create a network of transportation infrastructure, upgrade current warehousing and logistics infrastructure, reduce logistics costs, and encourage operational efficiency in logistics.

Meanwhile, front- and back-end subsidies will be provided to the beneficiary projects, including a waiver of the development fee, a reduction in the land use change levy, and an exemption from stamp duty. The 2018 policy will be replaced by the new one, which will be in effect for five years. The previous policy's promised incentives for private sector projects will still be in effect, though.