Industry Body ICC estimates loss of INR 50,000 crore for the logistics sector due to lockdown

icc predicts loss

Industry body Indian Chamber of Commerce (ICC) on Thursday estimated that the logistics sector will bear losses of about INR 50,000 crore due to the coronavirus lockdown.

It stressed on the need of a relief package for the logistics sector, after looking at the huge losses that will take a toll on the sector.

ICC also stated that the aviation sector will take the biggest hit with respect to mounting losses, in a statement.

“With the lockdown extended to May 3, the cumulative loss estimate is as high as Rs 50,000 crores with the highest loss coming from the Aviation Sector, followed by the Roadways, in terms of lost Toll Taxes and Goods wasted on the road due to a sudden lockdown, grinding to a halt fully loaded trucks.”

~Statement by the Indian Chamber of Commerce(ICC)

Although the government has stepped up efforts for resuming the operations of the logistics sector as per the new MHA guidelines,ICC has raised concerns that the situation is not as easy at the ground level.

Container freight stations, inland container depots, warehouses and port terminals, which come under essential services, are getting choked due to slow evacuation of containers and cargo.

“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. A lifeline needs to be extended to the industry,” the chamber said.

ICC demanded 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.

It also called for treatment of the Logistics sector as a priority sector for lending, stressing that sanctioned soft loans and existing loans be rolled over at a lower rate.

ICC also emphasized upon the need for a government-sponsored health insurance cover for all the employees of the sector and extension of construction period of ongoing PPP projects by 6 months to 1 year, besides allowing of GST input credit for such projects.

Besides, it sought for 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.

There was an imminent need for auto renewal of national movement permits till September 2020, ICC observed.

Logistics and Supply Chain sector got a green signal to operate, as per the fresh guidelines issued by the Ministry of Home Affairs (MHA) on Wednesday. These detailed guidelines were in the context of the extended lockdown till May 3 in the wake of the COVID-19 pandemic, as announced by the Prime Minister recently.

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