Administered as a Union Territory by India, Jammu & Kashmir is the largest producer of fruits, the land of the world’s most expensive spice, Saffron, yet, withholding exceptional trade potential. In this month’s regional story, Logistics Insider unearths the logistics potential of the UT and takes you through the logistical challenges, the ongoing transformation of the UT, and the reasons for the growing interest of investors.
Jammu & Kashmir in the earlier days, has been the link to Central Asian Trade Route (Silk Route) connecting J&K with Yarkand, Kho-tan, Tashkent, Samarkand, Balkh, Bukhara, Ashikabad, Baku (Azerbaijan), Armenia and Georgia denounced on to it through the Sindh Valley and the Indus River. The Jhelum River was an important transport artery.
However, it was during the medieval age that the mode of transportation for the then state shifted to road, following which, the now union territory (UT) came on the railway map in 1970, when the city of Jammu-Tavi was connected to Pathankot.
Presently the National Highway No 1-A i.e. Pathankot-Jammu-Srinagar-Uri, and Srinagar-Kargil-Leh, account for 80% of the freight traffic, and almost 140kms of railway lines are connecting the UT with the economic corridors of the country.
IS J&K MEETING ITS FULL POTENTIAL?
While J&K has notably come a long way, the logistics cost in the UT remains 10 -15% higher than the national average owing to the state’s lack of effective facilitation with regards to logistics- hindering the UT to meet its full potential. In the most recent Logistics Ease Across Different States (LEADS) Report 2021, within the North Eastern States and Himalayan Region, Jammu and Kashmir was the top ranker with a aggregate score of 2.64, followed by Sikkim and Meghalaya.
With over 60% of the State being mountainous, the goods in transit are subjected to rugged topography which is compounded by the vagaries of the weather which act as natural deterrents to developing a robust logistics infrastructure. In the absence of adequate protection and roadside facilities, the cost efficiency of goods is affected.
Highlighting the tough terrain of the UT with uncertain weather conditions, leading to disruptions in road connectivity as a major challenge for logistics growth, Sheikh Samiullah, CEO, FastBeetle says that the disturbing socio-political scenario and government negligence adds fuel to the fire.
Adding further he says, “Owing to security situation the Internet shutdowns, snapping mobile connectivity and power outages alongside the high-security zone makes it further rough for the accessibility and outreach.”
Withholding great potential for trade, J&K to meet its developmental and security goals, is in dire need to improve the standards of logistics services in the State in terms of accessibility, connectivity, transport operation, and management.
“We need suitable interventions for improving logistics performance of the State on key parameters, viz. Quality Logistics infrastructure, Quality of Logistics service providers, Efficiency of regulatory processes, Operating Environment favorability, Ease of arranging logistics at competitive rates, Timeliness of cargo delivery, safety/security of cargo movement and Ease of track and trace, “says Vivek Juneja, MD, Varuna.
AT THE CUSP OF TRANSFORMATION
Entering into its most robust growth phase of the 21st century, the UT is at the cusp of transformation with the State and Center government backing the growth. The government is envisaging to set up Multi-Modal Logistics Parks and Dry Ports in collaboration with local, national, and international companies in the field. In addition to this, the government also looks forward to completing the railway connection as well as the development of freight terminals.
Aiming to bring down the logistics costs of commodities from 30% to 10%, the State Government is setting up logistic parks in the State. In 2017, The Government of Jammu & Kashmir, the Government of Dubai, and the global trade enablers DP World penned down an MoU at World Government Summit held at Dubai (U.A.E), to explore opportunities to develop trade infrastructure in the Jammu & Kashmir.
Dubai’s Lulu Group in 2022 also inked down an MoU with the J&K government to set up a food
processing and logistics hub in Srinagar.
Following up with the MoU, DP World agreed to develop a multi-modal logistics park and hub in Jammu, comprising warehouses and specialized storage solutions that will encourage inter-modal transfer of containers, bulk, and break-bulk cargo, and later on in Kashmir Valley.
The Union government has declared four rivers namely Chenab, Indus, Jhelum, and Ravi in the state of J&K as national waterways to boost inland water transport. In addition, the State Government has also planned to develop an Inland Container Depot in Srinagar and a dry port in the State, which will eliminate the major impediment in the export sector. Earlier in Jan 2022, J&K Lieutenant Governor Manoj Sinha announced DP Worlds’ plan to build an inland port in the UT spread across 250 acres as part of the Emirates to invest in the Indian territory.
This is an abridged version of the original story that was published in the March edition of the Logistics Insider magazine. To read the complete article, click here.