Tamil Nadu is incentivizing logistics projects with investments of Rs 500 cr-plus

In order to boost the logistics sector on a large scale, the Government of Tamil Nadu will facilitate projects worth more than Rs 500 crore with tailor-made incentives.

In order to attract and facilitate financing for large-scale logistics infrastructure development, the government will coordinate with financial institutions such as the National Investment & Infrastructure Fund (NIIF), the Tamil Nadu Infrastructure Fund (TNIF) or other appropriate sources to mobilize funds.

According to the latest logistics policy, the government will promote the gradual development of a logistics master plan for major cities and metropolitan areas in the state to promote city logistics. It will identify and designate a minimum of 50 acres of land in strategic locations throughout the state for the development of multi-modal logistics parks, warehouse clusters and private freight terminals (PFT) to be developed through private participation.

The government, through the Department of Housing and Urban Development, will reclassify the warehouse segment to the industrial category to facilitate doing business in the state. It will also require existing warehouse developers to update their developments to streamline the registration process in the new subcategory under the Industries category within a set timeframe.

Sources in the government said that the availability of high-quality logistics services at competitive prices is one of the most important levers for increasing the competitiveness of companies. It allows access to various markets at competitive prices and contributes to the dynamism of manufacturing and other export industries.

The freight transport service sector in Tamil Nadu is heavily dominated by road transport. For example, export-import rail freight traffic to/from ports in the country accounts for only 10% on a variety of corridors. Additionally, in-state rail movements are largely confined to the state or nearby states, with interstate rail movements long dominated by road transport. Also, coastal shipping services and domestic container rail services are limited and limited to only a few routes.

To address these issues, the government, in coordination with the Ministry of Railways or its agencies, and through private participation on a pilot basis, will promote the uptake of container rail services and Kisan rail services on strategic routes as part of a market development approach. It will assess and identify strategic coastal shipping routes to encourage and promote intermodal transport that will result in cost-effective services.

In order to strengthen cold chain infrastructure and expand the market for perishables produced in the state, the government will encourage the availability of a refrigerated truck fleet by tax-supporting logistics or trucking companies with registration fees for the purchase/retrofit of refrigerated trucks. It will promote mechanization and automation of the warehousing sector in the state to improve handling capacity, efficiency and quality of services.

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