Sluggish manufacturing in MIHAN, low consumption mar logistics hub dream

By Dheeraj Fartode

SINCE the implementation of Goods and Services Tax (GST) in 2017, Nagpur was being touted as the next logistics hub of the country. Though the logistics and supply chain industry is witnessing tremendous growth in India after the roll-out of GST, in Nagpur the tall claims of the city taking centrestage in logistics industry has remained only a ‘political hype’.

The warehousing industry is witnessing just an organic growth in Nagpur. Logistic hubs are being set up by industries in other cities where either consumption is high or production is high. Nagpur is not matching on both the standards as the Multi-modal International Hub Airport at Nagpur - Special Economic Zone (MIHAN-SEZ) has failed to attract the manufacturing sector here.

“Before implementation of GST, expectations were high about Nagpur due to the significance of Zero Mile and good connectivity of roads, air and rail network. The logistics industry is definitely growing in Nagpur but the growth is not multifold. It was expected that all industries would pour in their goods in Nagpur and then distribute across the country. But the process is yet to gather pace,” Atul Rane, Chief General Manager of Container Corporation of India (CONCOR), told ‘The Hitavada’.

The CONCOR has a logistic hub in MIHAN. Rane termed it as organic growth in initial years, however, as far as the logistics park is concerned, he added that Nagpur was slowly witnessing a competitive scenario.

Rane sounded positive about Nagpur’s growth as a logistic hub in the future. The DLI Infrastructure has constructed a logistic hub at Borkhedi while a rail siding has been developed by Worlds Window Infrastructure at Wardha. The JNPT Dry Port also commenced operations in Nagpur apart from Adani Logistics at Sindi Railway near Nagpur. “Many logistics players are coming here. However, there is no growth in the manufacturing sector in Nagpur,” he added.

Shiv Kumar Rao, Vice-President of Vidarbha Economic Development Council (VED) opined that consolidation of warehousing industries was taking place after implementation of GST in India. Earlier, the companies had warehouses in every State. Now, the companies are operating with just six warehouses at major junctions. “The companies preferred to set up their warehouses near production facilities or where consumption rates of products are high,” he said.

As the MIHAN-SEZ failed to become the national hub of industries, development of Nagpur as a logistics hub was not possible, Rao said.

Port-side development of industries is high in India just like development in Mumbai, Chennai, Visakhapatnam and National Capital Region (NCR) which is a big area with high consumption. In Maharashtra, Bhiwandi has emerged as the major warehouse and logistic hub in India. Similarly, the entire south region is being fed by Hyderabad.

Nagpur can serve cities in the radius of 500 to 600 kms but it has to withstand a strong competition from Indore which has

grown as a major hub in central India. Chhattisgarh and parts of Odisha and Madhya Pradesh can be served from Nagpur by companies.

“It would be fantastic for logistic companies in MIHAN-SEZ to take off in early years. Due to the failure of MIHAN-SEZ, the salary grades are not very high in Nagpur which has resulted in low consumption,” Rao said.

Rao further pointed out that the Air Cargo Industry was yet to develop in Nagpur. “The authorities have not even conducted a meeting of international exporters and importers to give momentum to the Air Cargo Hub,” he said.

Suresh Rathi, President of Vidarbha Industries Association (VIA), said that there was no structured development of MIHAN-SEZ at Nagpur. Being the Zero Mile of country, the State Government should bring a logistics policy for Nagpur. If the industries get more intensive, it would definitely boost the manufacturing sector and logistic industries here.

Some companies are constructing godowns on the outskirts but this is not structured growth. Manufacturing industries are needed to boost growth of MIHAN-SEZ in Central India, Rathi said.

“We have missed the timing of development of MIHAN-SEZ into an international logistic hub,” Rathi added and also asked about the status of the second runway that was to be developed in the last decade.

To sum it up, all the administrations and authorities combined have miserably failed to take advantage of the central location of Nagpur city despite the presence of MIHAN-SEZ.