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A Brief Guide to Punjab
Logistic Policy
Only specialized transport vehicles (like refrigerated trucks, construction vehicles, chemical transporters, cryogenic vehicles) will be considered. Regular goods vehicles won’t be included.
A Logistics Park is a well-planned area where multiple logistics-related activities happen in one place. It must:
Value-added services include sorting, grading, packaging, palletizing, etc.
Ancillary services include equipment repair, maintenance, and testing.
An ICD is a customs-approved facility (not at a seaport) with:
A CFS is like an ICD but located near a port. It:
An Air Freight Station is a customs-approved facility near an airport (not inside) that:
These can also have areas leased out to e-commerce zones for added use.
These are rail cargo terminals approved under the Gati Shakti or PFT policies.
These are customs-approved areas meant to boost air cargo handling. Located inside or outside airports, they offer:
These facilities store and process perishable or temperature-sensitive goods like food, dairy, meat, fish, pharma, etc. Key components may include:
An MMLP is a big logistics hub connected to more than one mode of transport (like road + rail).
It must:
A warehouse is a place where goods are stored under proper conditions (e.g., temperature, humidity). It must meet all requirements laid out by the Warehousing Development and Regulatory Authority (WDRA).
A truck terminal is a facility built to reduce traffic in key areas (like highways, industrial zones, etc.). It must:
Importance of the Logistics Sector
The logistics sector plays a vital role in a country’s economic strength. Other industries depend on a fast, reliable, and responsive logistics network to grow. The COVID-19 pandemic highlighted how important it is to have strong and stable logistics and supply chains.
India has made significant progress in this sector in recent years. In fact, India moved up 10 places to rank 44th in the World Bank’s Logistics Performance Index 2018, compared to its position in 2014. However, there are still areas for improvement. The report suggests that India can reduce its logistics costs from 14% of GDP to 8%, which would make the sector much more efficient.
Government Support and Initiatives
The Indian Government is actively working to boost the logistics sector through several initiatives like:
To support these initiatives, the government is also focusing on building better infrastructure through schemes like:
Current Challenges
Despite improvements, the logistics sector still faces issues like:
To solve these problems, India needs:
This will help India achieve its goal of becoming a USD 5 trillion economy.
Institutional Measures
To further develop the sector, the Government of India created the Logistics Division in July 2017 under the Ministry of Commerce and Industry (MoCI). This division works as the central body to coordinate with states and other agencies, aiming to:
Key National Initiatives
These initiatives will help create a safe and efficient logistics system, supporting manufacturers, suppliers, and traders by reducing costs and increasing competitiveness.
Punjab’s Performance in LEADS
In 2022, Punjab scored high in:
Punjab has been graded as an Achiever in all 15 indicators below.
Road Infrastructure | Rail Infrastructure | Terminal Infrastructure | Warehousing Infrastructure | Modal Logistic Services |
Quality of services Terminals | Reasonable prices of logistic services | Timeliness – Transportation Services | Timeliness – Terminal Services | Track & Trace cargo movement |
Safety/Security of Cargo | Promoting, Incentivizing, facilitating | Ease of obtaining all approvals | Ease of entry | Issues related to grievance redressal |
In LEADS 2021, Punjab scored the highest in 10 out of the 21 parameters that were considered for rankings further Punjab scored the second highest in 4 other parameters. The State has shown good scores across infrastructure, services, and regulatory categories. Punjab was able to continue its trend of improvement by recording a score of 3.51 out of 4 in 2021 against that of 3.46 in 2019 indicating a 5% increment over its previous performance. The State’s proactive policies such as a single window clearance mechanism for regulatory approvals, fiscal incentives granted under the Industrial and Business Development Policy, and the presence of quality infrastructure have resulted in Punjab being a top performer State.
Note: Punjab scored the highest on 10 out of 21 parameters (as highlighted in purple).
In the year 2019, the parameters of assessing the performance of States were: availability and quality of logistics infrastructure, quality of services provided by service providers, ease of arranging logistics at competitive rates, timeliness, ease of track and trace, safety and security, state facilitation and coordination and efficiency of regulatory processes. The LEADS index score of the State was 3.46 and the State emerged as the cluster leader in the northern states.
For the year 2018, the parameters for assessing the performance of the State were Infrastructure, Services, Timeliness, Track & Trace, Competitiveness of Pricing, Safety of Cargo, Operating Environment and Regulatory Process. The LEADS index score of the State was 3.22. The State scored well on indicators such as quality of infrastructure, services offered, favourability of the operating environment, timeliness, safety and security and ease of track and trace but scored low on indicators such as ease of arranging logistics at favourable rates, efficiency of regulatory processes and timeliness of cargo delivery.
Punjab covers an area of 50,362 sq. km and is located in northern India. It shares borders with:
Thanks to its location, Punjab plays a key role in agriculture and industrial development in the region. The State’s economic growth took off during the Green Revolution in the 1960s, which led to the rise of micro, small, and medium enterprises (MSMEs). Today, Punjab is moving towards an economy driven by innovation and technology.
From 2015-16 to 2020-21, Punjab’s Gross State Domestic Product (GSDP) grew at a rate of 6.78% per year. The main industries in the State include:
Despite being landlocked, Punjab performs well in exports:
To strengthen manufacturing, services, and trade, the Industrial and Business Development Policy (2017) recognized logistics as a key sector. The State offers incentives for developing logistics infrastructure such as:
Punjab has also declared logistics as one of its thrust sectors, meaning it’s a priority for development and investment.
The Punjab Government is working to make each district an export hub by:
As part of this effort, Punjab launched its State Export Plan, which aims to:
The prominent industrial clusters of Punjab are as follows:
Punjab enjoys strong connectivity with neighboring states and the rest of India through a well-established network of roads, railways, and airports. The State is served by 15 national highways covering a total length of 3,228 kilometers, along with 1,103 kilometers of state highways. The total road network spans over 1.39 lakh kilometers. Punjab also has a well-developed railway network stretching over 2,269 kilometers, which accounts for 3.4% of India’s total railway coverage. Its rail density is more than twice the national average, providing a strong backbone for freight and passenger movement.
In terms of air connectivity, Punjab has four domestic airports and two international airports. Among them, Amritsar and Chandigarh airports play a key role in air cargo movement. In the year 2020–21 alone, Amritsar airport handled 1,253 metric tonnes of freight, while Chandigarh airport managed 8,069 metric tonnes. These transport linkages position Punjab as a strategically important state for trade and logistics.
Despite its strengths in agriculture and industrial production, and its strategic proximity to major economic centers including the national capital, Punjab has not been able to fully capitalize on the value of its goods. Several challenges hamper the efficiency of its logistics sector. These include uneven development of roads, poor last-mile connectivity, lack of proper storage and refrigerated facilities, and an inefficient use of different modes of transport. These issues contribute to higher logistics costs and lower competitiveness in trade.
To address these challenges and unlock the State’s full potential, there is a clear need for a well-defined and comprehensive logistics policy. Such a policy would provide direction for infrastructure development, improve coordination across transport modes, promote investment, and build an efficient logistics ecosystem. With the right strategy, Punjab can transform into a logistics hub for northern India, supporting its economic growth and boosting exports.
A. Industrial Corridors
B. Rail Freight Corridor
Lower logistics cost and improved transportation efficiency.
C. Storage, Warehousing and Transportation
The State has presence of several ICDs (Inland Container Depots) and CFSs (Container Freight Stations) developed at:
The State has presence of 6 PFTs (Private Freight Terminals)
The State has presence of Integrated Check Posts (ICP)/ Land Customs Station (LCS)
The State has presence of 2 Air Cargo Complexes (ACC):
To improve the logistics efficiency in the country, the MoRTH has planned to develop state of art Multi-Modal Logistics Parks (MMLPs) across the nation under Logistics Efficiency Enhancement program (LEEP). The Parks under the MoRTH with minimum area of 100 acres will comprise of specialized storage facilities like cold storage, mechanized and integrated warehouses, integrated technology, mechanized material handling and inter modal transfers of containers and cargo from different carrier mediums.
For the state of Punjab, the policy envisages MMLPs for Jalandhar, Amritsar, Gurdaspur, Ludhiana, Sangrur and Patiala making the state a northern hub. At present, notable MMLPs in State are:
The State of Punjab has 9 Custom Ports, 6 Private Freight Terminals, 3 Integrated Check Posts/ Land Custom Station, 2 Air Cargo Complex and 3 MMLPs
D. Vision
“To drive the economic growth of Punjab through an efficient, effective, sustainable and integrated logistics network by leveraging latest technology and well laid down operational procedures. The policy aims to create a framework which provides cost effective and reliable infrastructure along with skilled manpower”
E. Policy Objective
To increase the competitiveness of goods produced in the state and to boost job creation and manufacturing in the State has initiated the development of a robust and integrated logistics policy which shall support efficient and modern industrialization in the State. The Policy works in tandem with the objectives set forth in Industrial and business development policy – 2017 which may be extended by the state or any subsequent policy that may supersede/follow.
The objectives of the policy are as follows:
Through this policy, Govt. of punjab aims to attract investments in the following key sectors but not limited to:
F. Policy Implementation
G. Policy Features
Guided by the vision of this policy, the policy features are categorized under the following four broad pillars:
These pillars form the structure to support a better and effective outlay with well-defined policy features that address the objectives of this policy.
H. Infrastructure
With the Central Government announcing Gati Shakti NMP, the focus is being given to planned and coordinated infrastructure development which will be transparent, and data driven. The aim is to facilitate infrastructure development in an objective manner such that efficiency of work is increased and duplicity and overlapping of work between different departments can be minimised.
The State shall act as a facilitator to the Centre in this activity. The State Government will take the following steps to have readiness for seamless integration with Gati Shakti NMP, as and when it is notified:
Planning for export growth in India has historically been a centralized process. This new approach of encouraging districts to become the export hubs not only decentralizes the planning process, but also puts at its centre the most valuable stakeholders, i.e., the local producers and manufacturers. Exports are emphasized not just to reduce trade deficit but as a mechanism for boosting rural economic growth too, making local products more attractive for consumers across the world and supporting employment generation through empowering of the MSME sector. For this purpose, the district is the ideal administrative level to integrate the rural economy with the industrial economy and to create a green channel for the MSME sector to access international markets.
Therefore, to realize the vision of creating export centric economic development, it is important to develop adequate logistics ecosystem which will transform the State of Punjab into an export powerhouse. To increase efficiency in the supply chains and augment export infrastructure, following measures shall be undertaken:
The State shall promote development of quality food storage facilities in grain procurement zones/clusters/Mandis to meet the requirements of rapidly growing agro and food markets. The storage facilities shall include warehouses, silos, temperature controlled perishable cargo storage facilities and related handling & transport infrastructure.
The State shall undertake comprehensive need-gap analysis of existing domestic and export oriented infrastructure across the entire agricultural and processed food value chain.
The State shall undertake measures to equip APMC and non-APMC mandis with last mile connectivity including all weather, 24×7 access roads and rail connectivity wherever possible at major procurement centres. This will help in reducing significant costs of logistics for bulk agriculture commodities.
The State shall undertake measures to sensitize warehouse staff and cold storage owners and encourage and facilitate accreditation/registration of their warehouses.
The State shall undertake suitable interventions to popularize small scale local storage of produce by farmers. This will help in avoiding distress sale and giving better price realisation.
The State shall undertake measures to establish multipurpose cold storages with temperature-controlled transport vehicles rather than conventional single commodity storage with the focus shifting from just storage to end to end cold chain.
The state shall undertake measures to encourage containerisation of domestic agriculture goods which shall enable direct transport of grains from Mandis to food processing factories thus minimizing additional cargo handling and associated wastage & pilferage. Such measures can include fixing quota for using Domestic containers for transport of state procured food grains and facilitate FCI in adopting containerized transport of food grains from mandis in State.
The State shall adopt a data driven mechanism which identifies areas of concern based on the growth of the city and other factors such as transport restriction of goods, modes of transportation, tracking of commodity flow etc.
Cities bring complexity of stakeholders in such domains which include manufacturers, retailers, consumers, city residents, daily commuters, logistics service providers, freight carriers and enforcement agencies. For this the State will work on uniting them to bring better efficiency in the system whilst giving due consideration to interests of all the stakeholders.
The State shall support Freight Smart Cities and adopt best practices for adoption of efficient and hassle-free transportation solutions.
The State shall facilitate the convenience of the residents and commuters that travel through cities.
Freight Smart Cities
To combat the key challenges of environmental impact, high costs and congestion in the cities due to freight movement, “Freight Smart Cities” have been envisaged. Freight Smart Cities will act as a standard for planning of inter and intra-city logistics. The State shall endeavour to adopt best practices to develop such Freight Smart Cities. This will include widespread use of technology initiatives along with a well-coordinated approach for infrastructure development based on empirical studies. To further improve vehicle (both freight and non-freight) movement, vehicle movement and usage shall be planned more methodically to achieve a solution that maximises the available road usage and paves the way for properly planned areas for future development. Government of India has proposed 75 Freight Smart Cities across the country from which the cities of Amritsar and Ludhiana have been recognised as Freight Smart Cities in Punjab. The State shall support the development of these cities and any other cities as and when declared by the Government of India.
The State shall oversee that these Freight Smart Cities are planned in tandem with the City Logistics policy for a smooth and congestion-free experience of freight transportation.
The objective is to implement a robust end-to-end urban city freight system that takes care of all the stakeholders in the most efficient way possible.
The State shall set up and monitor independent “City Logistics Committee(s) (CLC)” for Freight Smart Cities, which shall be responsible for the implementing logistic plans and initiatives along with coordination with various State and Central Government agencies.
This will also facilitate a broader plan of State-level integration which will a part of a grater national freight integration.
E. Development of Logistic Parks
Logistics Parks are the dedicated infrastructure created in form of Multimodal or Unimodal logistics terminals catering to various requirements of transportation through one/multiple modes (Rail/Rakes, Road, Inland waterway, Air), providing associated facility of transit, non-transit, bonded, non-bonded warehousing along with other value-added services like packaging, consolidation, specialized handling, sorting of cargo for one or many types of cargo which can be bulk, break-bulk, container(FCL/LCL/Tank), liquid, Chassis, automobiles etc. These can cater to exclusive EXIM or Domestic or both EXIM & Domestic cargo.
These infrastructure creation projects are long gestation projects with minimum establishment time frame of 2-3 years. There are policies governed by Central government nodal ministries governing the approval process and establishment of various kinds of customs ports and other logistics facilities, these are:
Logistics parks may or may not incorporate the above defined facilities and can be limited to basic truck/road-based terminals. The minimum area requirements are described in the policies governing these individual projects and investors have to consider larger dependencies before making an investment and completing the projects.
To promote creation of logistics park and related infrastructure, the State would facilitate investors by:
I. Technology and Innovation
It is important for the State to deepen its penetration of technology to strengthen enforcement of laws and to identify offenders without causing loss of time and disturbance in the market. This would also help the State to reduce dependence on physical – by sight enforcement, thereby reducing the need to devote human resources to on-road enforcement teams. To enable this ecosystem, the State Government will work towards adopting IT based, data driven, risk assessment-based enforcement of regulatory compliances so that idle time on highways & logistics costs can be reduced.
Smart Enforcement refers to a range of technological interventions aimed at simplification of processes, reduction in physical check posts, using technology for remote enforcement and transparency along with capacity building and training of enforcement officials. This would be done through development of a State-level database for offences and use of new-age enforcement tools such as cameras, sensors, weigh-in-motion (WIM), portable scales etc. for automated on-road enforcement. It would also require integration of various databases like Aadhar, Vahan, and other applications like e-Waybill and GST and data associated with them. This will move the sector towards an eco-system of minimal inspection and stoppages of trucks on roads. Once implemented, it would result in increase in utilisation level of the trucks, reduction in overall transit time and logistics cost.
The State shall augment existing technological interventions on a broader scale. For example, the Punjab Excise and Taxation Department has mandated GPS enabled tracking devices carrying ethanol, spirits, and other such items to check their pilferage for making spurious liquor. There also exists app based issuance of e-challan. Hence to have a robust digital infrastructure in place, the State shall coordinate with other line departments such as Transport, Revenue, IT etc. to synchronize their efforts and take initiatives for effective implementation of the Smart Enforcement across the State, some of which will include:
The State shall develop a customized Risk Management System (RMS) for meeting the needs of enforcement agencies and designated zones.
The State should create a dedicated Data Centre for capturing violations and to aid in informed functioning of enforcement agencies. The State shall also promote setting up of PM Gati Shakti data centres.
The State shall develop a common and connected infrastructure of traffic cameras, RFID readers, sensors, WIM weighbridges, use of body cameras by vehicle inspectors.
The State shall onboard with initiatives of Logistics Division to develop an app that will get data feed from collected common IT infrastructure as well as GST e-waybill and Vahan databases and app-based challans will be issued.
The growth of logistics sector has been accompanied by adverse impact on environment in terms of increased pollution levels, consumption of scarce resources such as water and energy and high wastage related to packaging etc. Given this imperative, it is important to implement Green Logistics and minimize the environmental impact of logistics activities to ensure sustainable growth.
To give impetus to green logistics, the State shall undertake environmentally friendly initiatives. This includes:
The State shall encourage use of robotics and automation in cargo transportation, de congesting cargo traffic and material handling.
The State shall encourage use of blockchain technology for exchange of information and documentation as well as transaction in a secured manner.
The State shall encourage use of augmented intelligence tools for demand planning, route and operations planning etc.
The State shall also undertake measures to incubate and promote start-up ecosystem in collaboration with industry/academia to accelerate. digital innovation. It shall also undertake measures to incentivize technical patent registration by technology providers, start-ups etc.
The State shall also identify strategic logistics assets and facilitate in upgrading them to meet quality standards in terms of their design, construction, and quality.
The State shall encourage to develop a network of Centres of Excellence for innovative solutions/emerging areas in partnership with industry/ academia.
The State shall promote a Start-up ecosystem in collaboration with industry/ academia to accelerate digital innovation.
The State shall form a coordination group to facilitate the movement of commodities and address logistics bottlenecks in emergency situations.
The State shall establish a framework for resiliency plans for the logistics network wherein logistics support shall be extended to other Ministries/ Departments for better management of relief and rehabilitation during a crisis or a disaster.
The State shall identify and designate specific logistics hubs as disaster support cells.
The State shall also review the need to develop a dedicated scheme for financial support to small fleet owners in times of extended disruptions, which would not only foresee their financial stability, but also their health and well-being.
J. Policy and Regulatory Framework
The Government of Punjab has been working diligently in the direction to make Punjab an investor friendly State. To encourage greater investments the State has already started with great initiatives such as a single window – Business First portal along with proactive steps such as auto-renewal and deemed approvals. The State will continue its work in this direction to continue its path for making systems more investor friendly and easy to access. This will be done by adopting digital tools along with process improvements to cater to the needs of the investors.
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