Kerala State Government In Full Speed Towards Better Logistics Infrastructure


With the Vizhinjam International Container Transshipment Terminal to become open for operations soon, the state of Kerala is reworking its policies and revamping infrastructure to help the logistics sector leverage the opportunities that arrive with it. It is worth mentioning here that the Vizhinjam terminal holds the potential to turn the state into India’s prime logistics hub once completely operational.

Kerala’s Industries Minister P Rajeeve, while recently releasing the state’s draft logistics policy, announced investment subsidies for logistics parks – INR 7 crore for a 10-acre logistics park and INR 3 crore for a 5-acre mini-park. According to the draft policy logistics parks shall also be declared as industrial zones and a single window system shall be established to approve them.

The draft policy also provides for skill development projects in storage, transportation, and other related services, while recommends stamp duty exemption for logistics parks and mini-parks, and high-level panels for coordinating and approving proposals.

According to a report by the Kerala State Industrial Development Corporation (KSIDC), the wealth of natural resources present in Kerala make a favourable case for developing niche logistics sectors. Verticals such as cold chain logistics, agro-processing, spices, handicrafts, coir, and rubber require specialized logistics and packaging services.

Talking about the state’s consumption power, Suman Billa, Principal Secretary, Industries Department said, “Kerala consumes more than 6% of the country’s fast-moving consumer goods. The government intends to tap this potential through a comprehensive policy.”

Together, the consumption and supply of resources point to the need to explore new sectors such as e-commerce, express delivery, and reverse logistics on the back of digital technologies and innovations such as AI and blockchain to enhance logistics efficiency and transparency.

KSIDC Chairman Paul Antony says Kerala has limitless possibilities in the logistics sector and the industry players have a big role in tapping it.

On the other hand, there is a lot to be explored in the area of inland waterways as a major mode of transportation in the state. Kerala’s long coastline, a string of big and small ports, 44 rivers flowing from the Western Ghats into the Arabian Sea, and the vast network of backwaters make it ideal for developing waterways transport on a large scale. Additionally, the state cn also indulge in developing multimodal transportation network with the four international airports and extensive rail and road networks present.

As per sources at KSIDC, the government intends to submit the policy for approval by June, after considering the suggestions from stakeholders.

Other areas mooted for investment include the construction of modern, organised, automated and specialised warehousing facilities, especially for perishable goods; multimodal logistics parks for seamless movement of goods; development of green packaging solutions using biodegradable or reusable materials such as bamboo, cardboard, paper or corn-starch; and digitisation of logistics operations, including use of blockchain technology, to enhance supply chain visibility, real-time tracking, and transparent transactions.

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