- The vision of Tamil Nadu is to develop an integrated, reliable, cost-efficient and sustainable logistics system for enhanced competitiveness and fast-tracked economic development of the State. This will be achieved through
- Reduction of cost of logistics (for export-import as well as domestic freight) in the State
- Leveraging private participation for development of logistics infrastructure; and
- Formulating an effective coordination mechanism between State and Central agencies towards facilitation and execution of initiatives concerning the logistics sector
- Consistent high ranking of the State of Tamil Nadu in the LEADS index of the Government of India
- Enhanced economic growth and employment generation
- Tamil Nadu is India’s second largest State economy, accounting for 9.47% of the country’s Gross Domestic Product as of 2020-21.
- The State has four air cargo terminals at Chennai, Coimbatore, Madurai and Tiruchi. It has around 6,600-kilometre network of National Highways, ~11,275-kilometre network of State Highways and 3,852 track kilometres of railway network catering to inter and intra-State freight movement. Further, several large transport infrastructure projects are in the pipeline to support economic growth and requirements of the State.
- Tamil Nadu has a well-functioning logistics eco-system and supports the State’s industry. The State has the second longest coastline in the country with the presence of 3 major seaports (in Chennai, Ennore and Thoothukudi) and 15 minor ports (Kattupalli being the largest developed on PPP). To cater to movement at these ports, several ICDs and CFSs have been developed in the hinterland, serving industries in Tamil Nadu as well as adjoining States.
- The Gross State Domestic Product of Tamil Nadu expanded at a healthy Compounded Annual Growth Rate of 10.02% between 2014-15 and 2020-21, viz-a-vis 9.46% for the country, to reach Rs. 19.03 trillion.
- The Government of Tamil Nadu has set a target for its GSDP to reach USD 1 trillion by 2030. To meet this target, the State has planned to grow the manufacturing sector from USD 48.1 billion in 2020-21 to USD 250 billion by 2030-31.
- The Indian logistics industry was valued at approximately $215 billion in 2020 and is projected to reach $360 billion by 2030, growing at a CAGR of around 7.3%.
- Further, the State has also planned to grow the exports from ~USD 26 billion to USD 100 billion by 2030. To realise the envisioned economic targets, enhancing competitiveness of the State’s economic sectors, especially agriculture and industry, is imperative.
Supply Chain & Logistics
Advantage Tamil Nadu
Introduction
Tamil Nadu is one of India’s leading States when it comes to industrialisation and economic development. The State has a well-developed Supply Chain and Logistics infrastructure, thanks to its strategic location on the southeastern coast of India and its proximity to major ports and transportation hubs.
As per a study conducted by the National Council of Applied Economic Research (NCAER), logistics costs as a percentage of GVA for some of the prominent sectors in the State are: Agriculture: 21.6%, Textile & Apparel: 7.91%, Electronics: 4.19%, Cement:12,97% and Machinery 17.9%6.
The World Bank’s Logistics Performance Index report mentions that while low- income countries were mainly focused on logistics infrastructure and facilitation, middle-income countries were focused on improving skills and services. High-income countries, on the other hand, were found to be putting more emphasis on adoption of green logistics and infusion of technology in the existing networks.
Sub Sectors
- Freight and Transportation Companies
- Courier Services
- Warehousing and Distribution
- Third Party Logistics Providers
- E-Commerce Delivery Companies
- Reverse Logistics
- Supply Chain Technologies
- Freight Brokerage and Matching Platforms
- Customs and Trade Compliance
- Cold Chain and Temperature-Controlled Logistics
- Supply Chain Consulting and Advisory
- Warehouse Robotics and Automation Solutions
Initiatives
Union Government
The Unified Logistics Interface Platform is an initiative of the Central Government to integrate data from various sources under one umbrella to support improvement of logistics efficiency and reduction of logistics costs. The platform has the ability to promote Multi Modal Logistics Transport/efficient operations with integration of digital initiatives of various agencies (Freight Operations Information System (FOIS), Port Community System (PCS), Air Cargo Community System (ACCS), Indian Customs Electronic Gateway (ICEGATE), etc). This platform also enables interfaces that enable tracking and tracing concepts towards improving logistics service and reliability.
State Government
Tamil Nadu State Logistics Policy 2023
For the fiscal incentives provided under the Tamil Nadu State Logistics Policy 2023, TIDCO will be responsible for formulation of operational guidelines. For all investment above Rs.50 crore, Tamil Nadu Guidance will be responsible for proposal/application evaluation and recommendation to the Industries Department for sanction of incentives. For all investments up to Rs. 50 crore, the evaluation of proposals and applications will be carried out by FaMe TN and sanctioned by the Commissionerate of Industries and Commerce.
State Industries Promotion Corporation of Tamil Nadu Limited (SIPCOT) will be the disbursal agency of incentives listed out in this policy for investment category above Rs. 50 crore. For all investments up to Rs.50 crore, the Industries Commissioner and Director of Industries and Commerce (ICDIC) will be the responsible agency for disbursement of incentives.
Tamil Nadu Guidance, as the designated nodal agency for facilitating single window clearances, will also be the nodal agency for the same service to logistics enterprises in the State for all investments above Rs. 50 crore. The single window facilitation for MSME segment will be undertaken by FaMe TN, Commissionerate of Industries and Commerce and District Industries Centre.
- GoTN will leverage the GIS layers of the State Master Plan being prepared under the PM Gati Shakti National Master Plan for enabling integrated planning and connectivity enhancement.
- It will encourage capacity expansion of existing ICDs/ CFSs/ AFSs/ FTWZs and development of new ICDs/ CFSs/ AFSs/ FTWZs, through provision of government land in accordance with extant land allocation policy and increase in demand at strategic locations in the State, as per the provisions of Policy and Guidelines for setting up of Inland Container Depots (ICDs), Container Freight Stations (CFSs) and Air Freight Station (AFSs) by Government of India.
- GoTN will identify unutilised factory sheds within the existing industrial parks/estates/clusters in the State and make them available for logistics activities, wherever feasible.
- It will undertake development of primary processing centres in the State to cater to the requirements of primary processing of horticulture produce. Further, it will identify locations/clusters for development and strengthening of cold chain infrastructure in the State.
- It will assess and identify strategic coastal shipping routes to encourage and promote inter-modal transport that will result in cost effective services.
- It will coordinate with the relevant agencies/airport operators to improve quality of air cargo-related services at air cargo complexes in Tamil Nadu.
- It will engage with the Central Bureau of Indirect Taxes and Customs (CBIC)/airport operators/port authorities and operators on a continuous basis to take appropriate steps for reducing the dwell time at air cargo complexes and seaports in the State.
- It will encourage Startups in the logistics sector to avail funds and benefits within the Tamil Nadu Emerging Sector Seed Fund and/or TANSEED under the Tamil Nadu Startup and Innovation Policy.
- It will develop a Logistics Labour Market Information System that will be a repository of details of the logistics sector workforce in the State, accredited by relevant agencies for their skills.
Incentives – State logistics Policy 2023
- Providing one-time reimbursement of 100% of the patent registration fees in India to technology providers, Startups and other business units developing technology-enabled solutions for logistics efficiency improvement, subject to a cap of Rs. 25,000 per patent. The incentive will be available to enterprises having registered offices in Tamil Nadu and to individual entrepreneurs who are residents of the State.
- One-time cash award of 50% of the technology adoption cost, capped at Rs. 1 crore, to three applicants annually for adopting modern technologies such as RFID, Global Positioning System (GPS), IoT, Robotics & Automation, Blockchain, Artificial Intelligence and Data Analytics, among others. The incentive will be made available to logistics service providers having registered offices in Tamil Nadu. TIDCO will call out applications annually and shortlist them to encourage entities towards technology adoption.
- One-time reimbursement of 100% of reefer vehicle registration charges in the State, and road tax for one year for reefer trucks, including retrofitting of capacity > 15 MT, by logistics trucking companies and enterprises registered in Tamil Nadu. The fiscal incentive will be provided to the registration of first 500 reefer trucks in the State during the policy period.
Resources
| Parameters | Unit | Value | Year | Source |
| Road Length | Km | NH = 6858 SH = 11275 | 2020-21 | MoRTH/NHAI State Govt |
| Railway track | Track-km | 6836 | 2019-20 | MoR |
| Inland Container Depot (ICD) | nos. | 11 | 2021 – 22 | CBIC |
| Container Freight Station (CFS) | nos. | 46 | 2020 -21 | State Govt |
| Private Freight Terminal (PFT) | nos. | 1 | 2020-21 | State Govt |
| Air cargo terminals | nos. | 6 | 2020-21 | AAI & State Govt |
| Rail goods sheds | nos. | 116 | 2020 -21 | State Govt |
| Warehouse Capacity (incl. State, Central, private owned) (MTPA) | MT | 1472098 | 2020-21 | State Govt |
| Cold storage capacity | MT | 400210 | 2020-21 | State Govt |
| Port traffic | MT | 108.6 | 2019-20 | State Govt |
| Logistics training centres | nos. | 1 | 2020-21 | State Govt |
| No of individuals trained in logistics | nos. | 2000 | 2020-21 | State Govt |
The State has awarded works (Package 1 for Chennai peripheral ring road) to ease movement. NHAI is constructing a two-tier elevated corridor to Chennai Port.
- NHAI is constructing Chennai-Bengaluru Industrial Corridor and NH connecting Tambaram to Chengalpattu. In addition, the State is also increasing first/last mile connectivity of industrial clusters under CRIDP & IEF.
- Vallandu bridge, Madurai-Thoothukudi Road and Thoothukudi ring road are being developed by NHAI.
- The State has initiated the development of Palayamkottai road stretch under the Chennai-Kanniyakumari Industrial Corridor Programme (SH 40).
- The State is in the process of developing truck parking facilities at industrial clusters of SIPCOT/TIDCO. The truck parking facility at Nilakkottai and 13 other industrial locations is operational from 2021.
- The State is taking necessary measures towards development of truck lay-bys along major State Highways under various road sector programmes like TNRDC and TNRSP.
- The State has initiated the upgradation and expansion of Cuddalore minor port which shall enhance its capacity.
The State, jointly with central agencies (NHLML/NHAI), is taking multiple initiatives towards development of logistics parks at strategic locations. Development of Chennai MMLP is under bid evaluation and DPR and site identification for Coimbatore MMLP is under way. - The State is taking necessary steps towards development of primary processing centres at strategic location under the Tamil Nadu Supply Chain Management Project. Additional 20 locations have been identified for establishment of PPCs under NABARD Rural Infrastructure Development Fund.
- The cargo terminals in Tamil Nadu are offering services round-the-clock. There are no restrictions on the number of working days. The operation cycles are planned as per the shipment and end user requirement.
- The State has launched its flagship scheme Tamil Nadu Naan Mudhalvan Scheme in March 2022 which covers upskilling training courses related to the Logistics sector.
- The State is promoting various skill development programmes for the Logistics sector through TN Apex Skill Development Centre (Logistics). In addition, the CII Institute of Logistics and TVS Supply Chain Solutions are also conducting various certified logistics skill courses in the State.