ICRA lauds CBEC policy revision for CFS/ICD/AFS to address overcapacity concerns

  • Industry News
  • Nov 19,20
The revised policy for setting up CFS/ICD/AFS tries to address the issues of geographical disparity and concentration and aims to align future developments with projects like rail freight corridor and inland waterways.
ICRA lauds CBEC policy revision for CFS/ICD/AFS to address overcapacity concerns

The Central Board of Indirect Tax and Customs (CBIC) has notified revised policy and guidelines for setting up of Container Freight Stations (CFS), Inland Container Deport (ICD) and Airfreight Stations (AFS).  

The revised policy aims to boost investment in CFS/ICD sector in underdeveloped regions in India, while the approvals in regions where already high concentration is there will be discouraged except in exceptional cases. The locations will be classified as Green, Blue or Red. While, the green zone will be the locations where the ICD/CFS concentration are low and will be open for new proposals, in case of blue zones the proposals will be accepted only based on specific trade generating locations and in red zone, the new proposals may not be accepted, except in exceptional cases. Further, there are also distance norms between two facilities and from ports. The approvals will be in consonance with the national logistics policy/action plan.

K Ravichandran, Senior Vice President and Group Head, Corporate Ratings, ICRA commented, “The new policy considers the issues faced by the sector; including regional disparities in the concentration of facilities, with a high concentration of CFS in Western and Southern regions and the adverse impact of new initiatives like Direct Port Delivery (DPD)/ Direct Port Delivery (DPE) on the CFS sector. While the impact on volumes due to DPD implementation has stabilised to some extent, the margins have witnessed pressure and with growing investments in warehousing space, only CFS players with larger logistics offerings allowing them to re position their services will be able to continue in the long term. Hence, the zoning and distance rules in the revised policy will aid in more balanced development in the sector and prevent the concentration of facilities which will improve the viability of existing/upcoming facilities by reducing competitive pressure.”

ICRA notes that the revised policy has factored the developments in the sector in the last two decades, including the growth in volumes during this period; geographical concentration of CFS/ICD; implementation of schemes like DPD/DPE and other automation and efficiency improvement measures; and also, the infrastructure developments like Direct Freight Corridor and inland waterways.

Sai Krishna, Assistant Vice President and Associate Head, Corporate Ratings, ICRA informed, “The policy also aims to encourage the development of facilities along infrastructure corridors like railway freight corridors and inland waterways, which will complement Gov’t aim on improving multi modal transportation and logistics in India. These coupled with the zoning and distance guidelines should aid in more rational and balanced capacity additions in these segments going forward, which should also be favourable for the credit profile of the companies in the sector in the medium to long term.”

Related Stories

Process Equipment
Trump 2.0 may boost Indian pharma opportunities

Trump 2.0 may boost Indian pharma opportunities

Experts highlight that higher tariffs on Chinese goods might enable Indian firms to fill supply gaps in the US generic drug market, a critical region that accounts for 30% of Indian pharma sales and..

Read more
Construction Equipment
Sales of Indian MCE industry to fall by 5-7% in FY2025: ICRA

Sales of Indian MCE industry to fall by 5-7% in FY2025: ICRA

Road construction accounts for 35-45% of MCE sales in India, followed by mining (20-30%), real estate (10-20%) and other sectors (railways, water supply, power etc.).

Read more
Construction Equipment
India's MCE industry set for 70-80% expansion in 5 years: ICRA

India's MCE industry set for 70-80% expansion in 5 years: ICRA

The MCE industry, driven by the country’s infrastructure-led growth, has already witnessed a compound annual growth rate (CAGR) of 12% over the past decade (FY2015-FY2024), reaching 136,000 unit s..

Read more

Related Products

Heavy Industrial Ovens

INDUSTRIAL SUPPLIES

Hansa Enterprises offers a wide range of heavy industrial ovens.


Read more

Request a Quote

High Quality Industrial Ovens

INDUSTRIAL SUPPLIES

Hansa Enterprises offers a wide range of high quality industrial ovens. Read more

Request a Quote

Hydro Extractor

INDUSTRIAL SUPPLIES

Guruson International offers a wide range of cone hydro extractor. Read more

Request a Quote

Hi There!

Now get regular updates from IPF Magazine on WhatsApp!

Click on link below, message us with a simple hi, and SAVE our number

You will have subscribed to our Industrial News on Whatsapp! Enjoy

+91 84228 74016