Revised policy and guidelines for setting up new ICD, CFS, AFS

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Inland Container Depots (ICD), Container Freight Stations (CFS), and Airfreight stations (AFS), which looks into receipt, despatch and clearance of containerized/palletized cargo, in the last two decades have witnessed a plethora of changes. From cargo volumes and capacity going high to improvement in infrastructure with developments of expressways, national highways connecting ports to hinterland, to changing operations of export and import logistics and the implementation of policies and initiatives like Authorized Economic operator (AEO) program, Direct Port Entry (DPE), self-sealing (RFID seals), Self-assessment, Electronic Cargo Tracking System (ECTS) and RMS based facilitation, things have come a long way.

Keeping in account the changes in policy, landscape, technology, and logistics ecosystem, the Central Board of Indirect Taxes and Customs (CBIC) recently issued the revised policy & guidelines for setting up of ICD, CFS, AFS to meet the requirement of the changing paradigm and aspiration of the trade.

The New Policy

As per CBIC, the new guidelines take into account the present capacity, future growth potential & regional imbalances while addressing the need to bring and ensure uniformity, transparency & seamless approval process.

Further, it also addresses the identified regulatory and logistics concerns associated with the hard and soft infrastructure of ICDs/CFSs/AFSs in India along with establishing a framework of functional requirements about the design and operations of dry ports, as well as establish a certain process to enable sustainable growth to the sector.

The revised policy and guidelines also aim to lay down the appropriate institutional, administrative and regulatory framework for the development and smooth operation of ICDs/CFSs/AFSs, including procedures for regulatory inspection and the execution of applicable customs control and formalities.

Criteria for setting up new ICDs/CFSs/AFSs

Keeping in mind the distorted penetration of ICDs/CFSs accounting for increased cost and manpower issues, the new guidelines group the country in three parts of the area for opening new ICDs/CFS.

The groups will be Green Zone (The states low on ICD/CFS infrastructure. This will be open for proposal), Blue zone (States where the proposal will be accepted for specific trade generating locations with no existing facilities or with over-utilized facilities), and Red Zone (The sates have adequate ICD/CFS infrastructure. These will be closed for any new CFSs development, however, IMC may approve ICDs in exceptional cases.)

The criteria also include the distance of ICDs from ports and distance between ICDs. Further, the guidelines suggest that priority should be given to identifying and promoting ICD/CFS/AFS facilities, where the presence of such facilities is limited. As AFC is relatively new to India, hence, in the case of AFC, the IMC while considering the application, will only take into account the demand-supply gap and take the appropriate decision.

Furthermore, the ownership of land and minimum area requirements are also a major criterion for the development of new ICDs/CFSs/AFC. As per the guideline, the minimum area requirement is seven hectares for ICD having a minimum area of four hectares as Customs Notified Area and a minimum one hectare nominated for DPD DPE nominated space. The minimum area requirement shall be two hectares for a CFS and AFS 1000 Sq. meters of the covered area each for imports and exports respectively shall be made available.

For the establishment, the applicant must have the legal rights over the land which is proposed for ICD/CFS construction. If the land is not owned and the land is leased, the lease agreement with the lessor must be for 30 years.

The other criteria for establishment include prior experience and legal entity.

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