High cost of logistics is killing the competitive edge of products manufactured in Madhya Pradesh, a landlocked state, said industrialists demanding freight subsidy.
The high cost of logistics involved in transportation of goods from manufacturing unit to destination makes the product outpriced in the global market, said industrialists on sidelines of Global Investors’ Summit.
Flexituff Group promoter Saurabh Kalani said, “We are poised correctly for a good growth given a chance. There is a lot of potential provided we get better connectivity and improved logistics. Being a landlocked state, the logistic costs come much higher than other states and this makes us outpriced in the market.”
Industry players said transport subsidies to exporters will level playing field for everyone.
An international buyer from Malaysia, Taizoon Hyder Tyebkhan said, “I am into hardware business. I came to attend the event to meet suppliers of some hardware parts but unfortunately could not get any deals locked because of the price factor. Prices of products are very high in MP and do not suit my requirement.” Tyebkhan said in comparison to other countries the cost quoted by Indian buyers is about 5-10 per cent higher.
Industry players stressed on bridging the infrastructure and logistics gap to give a fillip to domestic manufacturing and exports.
Directorate General of Foreign Trade (DGFT) additional secretary Santosh Sarangi said, “MP needs to address the infrastructure and logistics gap. There are some key export clusters where the transportation facilities, connectivity issues still exist and those need to be addressed.”
He said there are spice parks in Guna and Chhindwara with a little bit of infrastructure and lots of companies will come up.
“After Gujarat, MP possesses the capacity to be a major player in spices and this is possible with a little bit of facilitation,” said Sarangi.
Industry leaders said that to facilitate exports and cut down logistics cost the state should develop dry ports especially in the eastern part of the state and add to the train network. The export promotion body FIEO has also urged Madhya Pradesh government to give freight subsidies in line with Uttar Pradesh and Chhattisgarh governments.
