India Resets Logistics Sector to “Hub-and-Spoke” Model

Introducing a multi-modal program to reduce logistics costs and make the economy competitive, India has abandoned its previous “point-to-point” logistics model in favor of a “hub-and-spoke” one, where railways, highways, inland waterways and airports will in tandem to form an effective transportation grid.

Nitin Gadkari, minister for road transport and highways, shipping and ports said in an interview, “It is for the first time that we have taken an integrated approach for the country’s transportation. This will increase India’s exports, provide employment opportunities, will be cost effective, and will make goods cheaper in the country.”

warehouse

The plan envisages setting up 35 multi-modal logistics parks at an investment of $10 billion  for the development of 50 economic corridors. An investment template for the states and the private sector will be prepared. The infrastructure will include installation of cooling plants, cold storage facilities, warehouses, gas stations as also facilities for truck maintenance. These logistics parks will serve as hubs for freight movement enabling freight aggregation and distribution with modern mechanized warehousing space, reports Mint.

 

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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