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India's draft policy on logistics ignores express industry, says lobby

THE draft National Indian Logistics Policy has overlooked the role of the express delivery industry, according to Express Industry Council of India (EICI)

India's draft policy on logistics ignores express industry, says lobby

THE draft National Indian Logistics Policy has overlooked the role of the express delivery industry, according to Express Industry Council of India (EICI)

20 August 2019 - 19:00

THE draft National Indian Logistics Policy has overlooked the role of the express delivery industry, according to Express Industry Council of India (EICI).

'We note that the policy document does not focus on the express industry and air cargo sectors, which are integral parts of the logistics network,' said the EICI statement, reported Chennai's Hindu daily.



'The air express has also been overlooked in the multimodal mix even though air is an essential segment of the movement of goods,' said EICI chief operating officer Vijay Kumar.



Mr Kumar said in developing countries such as India, an efficient air express infrastructure could contribute directly to global competitiveness of the country by ensuring just-in-time deliveries and reducing clearance dwell time.



The government had issued the draft national logistics policy with a target to bring down logistics costs from 13-14 per cent of GDP to 10 per cent 'in line with best-in-class global standards'.



The policy also seeks to optimise the current multimodal mix, where road has a share of 60 per cent, while railways account for 31 per cent and waterways nine per cent, to bring the sector on par with international benchmarks (25-30 per cent share of road, 50-55 per cent share of railways, 20-25 per cent share of waterways).



For the air cargo sector, aviation turbine fuel (ATF) is the single largest component of direct operating cost with a share of 40 per cent.



Excise duty and value-added tax, charged by central and state governments on ATF, add another 30-35 per cent to the cost.



The GST regime disallows input credit on ATF, increasing the tax burden on express cargo airlines further, the EICI said.



Said Mr Kumar: 'The government should permit express cargo airlines to avail input credit of excise duty as was done before the GST regime. ATF should be brought under GST and input credit on GST paid on ATF should be made available to express cargo airlines.'


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