Kerala’s Logistics Revolution: Driving Economic Growth

Kerala is ramping up its logistics capability, gearing policies and infrastructure towards leveraging opportunities in the sector, particularly with the upcoming commencement of operations at the strategically located Vizhinjam International Container Transhipment Terminal. With the potential of both the International Container Transhipment Terminal in Kochi and the Vizhinjam terminal, stakeholders anticipate Kerala becoming India’s primary logistics hub.

The state’s draft logistics policy, recently released by Industries Minister Shri P Rajeeve, includes investment subsidies for logistics parks: ₹7 crore for a 10-acre park and ₹3 crore for a five-acre mini-park. This draft policy also proposes declaring logistics parks as industrial zones and establishing a single-window system for their approval. Furthermore, it suggests allowing industrial land use for logistics services and initiating skill development projects in storage, transportation, and related services. Stamp duty exemption for logistics parks and mini-parks, as well as the formation of high-level panels for coordinating and approving proposals, are also recommended.

Kerala, consuming over six per cent of the country’s fast-moving consumer goods, aims to exploit this potential through a comprehensive policy. A report by the Kerala State Industrial Development Corporation (KSIDC) identifies the state’s abundant natural resources as conducive to developing niche logistics sectors, including cold chain logistics, agro-processing, and spices. It also advocates for exploring new sectors such as e-commerce, express delivery, and reverse logistics, with the adoption of digital technologies like AI and blockchain to enhance efficiency and transparency.

With its extensive coastline, ports, rivers, airports, and rail and road networks, Kerala is well-suited for large-scale waterways transport and multimodal connectivity. The KSIDC report outlines potential areas for investment, including coastal economic zones, inland water transport, and fishing harbours to boost marine product exports. The state government plans to submit the policy for approval by June, after incorporating stakeholder feedback.

Other investment areas include modern warehousing facilities, multimodal logistics parks, green packaging solutions, and digitisation of logistics operations. Additionally, the government has invested in cold chain infrastructure to promote the local economy, given Kerala’s prominence as a producer of agricultural and marine products.

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