Logistics ecosystem in Assam

The launching of the Assam Logistics and Warehousing Policy, 2022 is a significant policy initiative by the State Government toward making Assam the regional logistics hub. Assam ranked last in the LEADS (Logistics Ease Across Different States) 2021, among 21 major states in the country, and its rank dropped by six places compared to LEADS 2019, which speaks volumes about the challenges in implementing the policy. The LEADS 2021 report brought out by the Ministry of Commerce and Industry states that Assam's ranking dropped due to its poor performance in all indicators of infrastructure, services, operating and regulatory environment. Poor rail and road connectivity, expensive freight rates, issues of safety and security of cargo, lack of track and trace mechanism and limited support of the State to the logistics sector are the key challenges, the report highlights. The State Government according to "priority status" to the logistics sector in its policy is indicative of a renewed focus on logistics and warehousing over the next five years. Three major areas of logistics development that the policy seeks to address are: establish, improve and maintain progressive policies and regulations, and institutional frameworks to ensure the effective operation of the logistics sector and to create a fair and equitable competitive environment, ensure progressive development of logistics sector towards safe, green, energy-efficient and inclusive services sector and develop policies where market mechanisms do not work effectively. The Policy aims to map logistics facilities across the state to assess the existing capacity and operational bottlenecks of existing logistics facilities, services and the proposed development of road and rail networks at state and national levels and prepare a logistics master plan for the next ten years. The policy document highlights that the road network in the state accounts for 60% of the total road length in the Northeast, while its 2435 km railway network connects the state to the rest of the country and the 891-km-long National Waterways-2 and 121-km-long National Waterways-16 form the inland waterways network. Key challenges, among others, identified by stakeholders in the LEADS 2021 report include inadequate density of road and rail transportation networks across the State due to limiting transportation choices for the traders, inland waterway transport network lacking adequate draft, potholed highways slowing down and affecting cargo and passengers' movements and very high empty repositioning charges of containers for both export and import movement making the transportation cost very expensive. Poor maintenance of highways and frequent disruption on account of landslides are problems in road transport which are yet to get adequate attention for sustainable solutions. The policy's emphasis on harnessing the potential of inland water transport for the transportation of bulk commodities is explained by the economic and environmental advantages. The policy paper highlights that 1 litre of fuel can move an estimated 24 MT on road, 85 MT on railways and 105 MT on inland water Assam has nearly 10% of the navigable length of 111 national waterways the 15 national waterways can play a crucial role in logistics improvement in the state provided the navigable draft is maintained. Incentivizing the logistics movement on these waterways as spelt out in the policy is expected to attract private investments into the sector. The state government proposes to create a Rs 50 crore Viability Gap Fund under the policy for incentivising cargo vessel movement between Jogighopa and Nimati Ghat. Imagination and perceptions about logistics in Assam among stakeholders are expected to change in a big way after the commissioning of India's first Multi-modal Logistics Park at Jogighopa in Assam's Goalpara district currently under implementation. Land bank support to the logistics sector is assured by the policy by making it mandatory for earmarking 15% of any industrial park developed in the state for the development of logistics infrastructure including logistics parks, truck terminals, cold storage, warehouses, primary processing centres which will also be applicable for existing industrial infrastructures of the Assam Industrial Infrastructure Development Corporation or Assam Industrial Development Corporation. The Department of Revenue and Disaster Management prioritizing conversion of land wherever required for setting up logistics facilities is legal support to be extended under the policy, but caution needs to be exercised against indiscriminate conversion of agricultural land so that food security is not affected. Incentives of 100% road tax exemption and 50% exemption in vehicle registration to the developer under the policy in case of purchase of at least 15 hybrid or plug-in electric or electric cargo vehicles of minimum load capacity of at least 1MT per vehicle are aimed at promoting green logistics. Improvement in the logistics profile of Assam and other states in the northeast is critical to the region deriving optimal benefits of transborder connectivity projects pushed by India in Bangladesh, Myanmar and Bhutan for boosting trade, commerce and passenger movements. The policy ensuring ease of doing business will be crucial for building the desired ecosystem logistics.