Lockdown Effect: Logistics Sector To Lose Rs 50,000 Crore


The Indian Chambers of Commerce has estimated cumulative losses to about Rs 50,000 crore to the Logistics sector due to the on-going coronavirus lockdown.

The ICC is demanding a relief package for the industry, including priority lending and lower taxes. The highest loss is coming from the Aviation sector followed by Roadways in terms of Toll taxes and loss of goods due to sudden lockdown of all movements of Flights and Trucks.

Though the government has allowed movement of both essential and non-essential goods, the situation is not so easy at the ground level, it said. Container freight stations, inland container depots, warehouses and port terminals, which are all notified as essential services, are getting choked due to slow evacuation of containers and cargo, the report said.

“Moreover quarantining of ships for 2 weeks at high seas with delayed berthing is also adding to the chaos. Given the capital intensive nature of the industry, the standing cost of assets is very high, running into crores of rupees.

The ICC has sought number of relief measures like digital permits and packaged food service from NHAI for drivers after every 50 kms and complete waiver of EMI obligations for at least 6 months till earnings normalise. Demanding treatment of logistics industry as priority sector for lending — sanctioned soft loans and existing loans be rolled over at a lower rate, it also stressed the need for auto renewal of national movement permits till September 2020.

Besides, it sought a reduction in GST for the sector to lower than 12 per cent and waiver of revenue share and lease rental payable by PPP operators to government partners till September 2020 as well as waiver of minimum performance obligations of private operators till September 2020.