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Chennai sees logistics hub opportunities in post TFA, GST and DPD scenario

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According to Mr AV Vijaykumar, Vice Chairman, FFFAI (Paramount Shipping Services Pvt. Ltd, based in Chennai), the scope of exclusive Customs Clearance may diminish, there may not be significant change in Freight Forwarding and the opportunity for logistics as a comprehensive business – be it domestic or international – will scale up. The trade facilitation measure introduced over the previous years will bear fruits of ease in doing business in the days to come and hence there is a possibility that mere filing of declarations with Customs without value added service will require a relook in the business model. Add to this, implementation of GST which is system centric and the recipe will favour only those who are tech savvy.
He also maintained that while it is a positive step for India to adopt WTO TFA, the local flavour should not be disregarded. Regional restrictions and constrains related to infrastructure has to be in consideration when facilitation measures are introduced. “When we yet to fully address infrastructure related limitations at Ports, Airports and approaches to them, introducing trade facilitations measures need not necessarily produce positive yields. There should be a judicious moderation of facilitation and protectionism which presently is lacking. Instead of hastening progress such moves could bring down growth,” Mr Vijaykumar cautioned.
Commenting on Chennai’s position to be an ideal logistics hub owing to the above ecosystem Mr Vijaykumar observed that Chennai’s strategic location has enormous potential for the same, more so after implementation of GST. The FFFAI Vice Chairman pointed out that as a State Tamil Nadu has the distinction of becoming leaders in Auto, Chemical, Engineering, Leather, Pharma, Textile, Shipping, Transport, and many more core sectors and support systems like IT. Tamil Nadu is the gateway port for southern India and has a glorious past. In addition, customs initiatives to expand the DPD (direct port delivery) base – Chennai Port has the largest DPD facilitation in India – may add value to the Exim trade.
Hence opportunities are abundant though there have been some political imbalances for the past few quarters. Tamil Nadu is the gateway port for southern India and has a glorious past. In Mr Vijaykumar’s opinion, recent development and aggressive approach of the newly created port in the vicinity of the Chennai port, there is a challenge. However, with change of management of the Kattupalli port and likely commission of the container terminal at Kamaraj Port, Chennai will regain its premier position as a viable logistics hub in the Southern region of India.

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