Magnificent Madhya Pradesh
Investors' Summit
Indore, 18th October 2019

Madhya Pradesh- Emerging Logistics Hub Which Offers a Plethora of Employment Opportunities
Strategic location and accommodative policies of the government giving a boost to the sector
 

(MPPost) Bhopal, 16 October 2019, In the current GST regime Madhya Pradesh, because of its strategic central location has the potential to become India’s Logistics Hub. With its border touching 5 other Indian states approximately 50% of India’s population comes under the catchment area of Madhya Pradesh and provides direct access to them within 12 hours, by road, through Madhya Pradesh.

Positive impact of GST Reform on MP’s Logistics and Warehousing space
Post advent of Goods and Services Tax (GST), which subsumed an array of inconsistent state tax levies has established India as one market. Because of Madhya Pradesh’s strategic central location and its border touching five other Indian states, the state has immense potential to become India’s logistics hub.
India has a relatively higher logistics cost- almost 13-14% of GDP compared to the other countries like 10-11% in BRICS countries, 9.5% in US and 8% in Germany. This is a major impediment to the overall economic growth of the country. The current MP government was quick to realise that the problem can be dealt to some extent by developing logistics hub at various strategic places and hence MP can be promoted as the best-located state to handle this. Past rich experience of Shri Kamal Nath as Union Cabinet Minister of Commerce and Industry as well as Union Minister of Road Transport and Highways and his deep understanding about the corporate matters is proving to be a catalyst towards growth of the sector.

Logistics and Warehousing’ Policy- giving required push to the sector
Accordingly, GoMP came up with dedicated ‘Logistics and Warehousing’ Policy which reemphasised its commitment towards the development of the sector. MP has a vast pool of lands available. Though landlocked, the state government has been able to attract various industries which are export-oriented. It already has seven inland container depots (ICDs) located at Malanpur (Gwalior), Ratlam, Mandideep (Bhopal), Pithampur (Indore), Pawarkheda (Itarsi), Tihi (Indore) and Dhannad (Indore). Few of these ICDs are being set up by private players which shows interest and convenience felt by the private players in the logistics and warehousing space of the state. An International Air Cargo Facility has also been made available at Indore.

Why MP as a Preferred Destination for Developing Logistics Hub?
For any state to become a preferred logistics hub, it needs to have four basic attributes- strategic location in the context of the consumption market, vast pool of land, availability of unskilled and skilled labour and most importantly the thriving local industries in the area. Madhya Pradesh is geographically blessed to be perfectly positioned to serve major consumption market in the country. With Jawahar Lal Nehru Port Trust just 12 hours away from the state and with the presence of ICDs, all the formalities of export are being conveniently done at the source itself. Besides saving the time of consignments at the port, it also helps in avoiding high parking charges for containers at the ports.

Logistics sector requires vast reserves of land and MP has no dearth of it. The state has 120,000 acres of industrial land in MPIDC’s industrial areas.

Huge Employment Opportunities to the Labour Force
The development of the sector is promising massive employment opportunities to the youth of the state. MP’s labour force has a huge advantage over other states in terms of being quite peaceful and having least incidents of labour unrests as compared to labour protests in other parts of the country. Also, more than 300 large industries are already thriving in the state while many more are planning to soon set up units here. Their products are not only being transported in India but also being exported to different countries.

Accommodative Policies and Special Incentive Packages
The state government has been proactively taking multiple steps to promote the sector and introduced special incentive packages for investors interested in Logistics and Warehousing space. The government provides investment assistance to the tune of 15% (maximum of Rs 15 crore) on Gross Fixed Capital Investment (except for land and residential buildings). MP government is giving infrastructure development assistance to the tune of 50% (maximum of Re 1 crore) to construct access infrastructure to the site.

Besides, the government is also offering 100% reimbursement of stamp duty and registration fee on the instrument of mortgage done in connection with obtaining loan from banks for developing logistic and warehousing hub, and on purchase of land. Other sops being given to the investors are electricity duty exemption for 5 to 10 years for new High-Tension connection by DISCOM and relaxation in the floor-area ratio (FAR) of 1:0.60 and maximum ground coverage of 60%.

Given the above advantages and the focussed vision and trust instilled by the chief minister Kamalnath, MP is soon being preferred by many investors for the development of logistics and warehousing hub.