+ West Bengal, Eastern and North-Eastern India’s Key Logistics Hub - CII Blog

The growth of any economy depends significantly on the Logistics sector. A robust network of efficiently operated logistics, infrastructure and services establishes the uninterrupted flow of goods from their point of origin to the consumption centers. This in addition assists in the growth and prosperity of an economy. This sector comprises of warehousing, shipping, rail, road and air freight cargo and other value added services which play a quintessential role in driving exports and generating employment.

The introduction of GST, the growth in manufacturing, emergence of new industrial growth centers and increase in government investments in key infrastructure is likely to cause a growth in the Indian logistics sector from USD 160 billion to USD 215 billion by 2020.

As the fourth largest state economy of India, and by far the largest of the entire Eastern and North-Eastern India, West Bengal stands to grow its logistic sector manifold. The market size of West Bengal Logistics Sector is estimated to grow to around USD 20 billion by 2020.  Due to its strategic location and domestic and international trade linkages the state has a definite and immediate potential to develop as the logistics hub for the Eastern and North Eastern region, and is likely to emerge as the backbone of economic development for the same. Being a gateway to South-East Asia and especially to the growing economies of Bangladesh and Nepal, West Bengal is ideally placed to be the logistics hub of the country. Upcoming major infrastructural projects like the Eastern dedicated Freight Corridor or new deep-sea port at Tajpur also aides the growth of the logistics sector in this region.

West Bengal has five potential sites where end-to-end logistics park with multi-modal capabilities can be developed. Cumulatively, these have the potential to mobilize investments worth USD 1.5 billion and generate as many as 30,000 direct jobs.

The logistic policy introduced in the State, focuses on strengthening coordination between industrial, infrastructural and logistical initiatives, setting up of logistics centres of excellence, promotion of digital solutions to improve the efficiency of logistics service delivery and helps create the enabling climate for growth of start-ups in the sector.

Rising demand for agricultural exports from the state spurs the demand for logistical facilities in the State. Chemical and Petro-chemical Industry and Textile and Apparel Industry form the key industries of the State that highlight the considerable opportunities for harnessing the State’s logistics sector’s potential.

With a contribution of 3.2% to the national exports, West Bengal is the 8th largest exporting state in the country. With a waterfront of 950 km, the state is richly endowed with natural maritime advantages and potentially navigable waterways like the 560 km Haldia-Farakka stretch of National Waterways-1 which has been developed as a part of the multi-modal system for cargo from Nepal, Bhutan, North Bengal and the North-eastern states. Ports of Bengal, like the upcoming one at Tajpur have the opportunity to serve more than 19.2 billion people as identified by the trade route. Other than waterways West Bengal has one of the largest road coverage of the country, with more than 90,000 km of surfaced road, over 2,900 km of National highways and over 4,500 km of State highways. The state has 4000 km of railway network, again one of the highest in the country. The Kolkata airport is the 5th busiest airport in the country in terms of cargo handled.

With a waterfront of 950 kms, the state is richly endowed with natural maritime advantages and potentially navigable waterways, including National Waterway (NW) 1 and 15, new notified waterways, and tops the list in terms of spread, density, and reach of National Waterways in the country.

The state accounts for substantial share of the total length of National Waterways in the country. The 560-km Haldia-Farakka stretch of NW-1 has been developed as a part of the multi-modal system for cargo from Nepal, Bhutan, North Bengal and the North-eastern states.

The logistics sector potential of Eastern and NE India, in general, and West Bengal relies heavily on the ever-transforming consumer profile and unique industrial footprint of the region. The large consumer base of West Bengal, and the emerging consumer bases in states like Bihar, Odisha, Jharkhand, Chhattisgarh and NE India, serve as springboard for movement of goods into and within the region. In addition to this, the Eastern India region also offers a diverse mix of industries like jute, leather, tea, locomotives, steel and mining, each of which contribute more than 20 per cent of their respective national output. Estimates indicate that the five states of West Bengal, Bihar, Odisha, Jharkhand and Assam will grow on to contribute more than a quarter of India’s GDP by 2035, with West Bengal capturing nearly 15 per cent, thus representing a healthy growth curve for the logistics sector to ride on.

The success factors for a prosperous logistics eco-system include regional connectivity, the ability to adopt leading practices and digital solutions, and efficiently operating logistics parks.

While there are existing inefficiencies and challenges in infrastructure and operations, they can be overcome by investments and development of end-to-end logistics parks. The growth potential of the logistics sector in West Bengal is enormous. This can help the state to unlock hidden efficiencies in upstream operations of manufacturing and agriculture and improve consumer experiences in accessing goods, on time and at reduced costs, which in turn enables the social and economic development of the entire region.

Sources: https://home.kpmg.com/in/en/home/insights/2018/11/positioning-west-bengal-as-a-key-logistics-hub.html