INDIAN INSTITUTE OF MANAGEMENT SHILLONG

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Dr. APJ Abdul Kalam Centre for Policy Research and Analysis Presents

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LOGISTICS MANAGEMENT IN THE EMERGENT NORTH-EAST INDIA

Strategic and Developmental Imperatives

IIM Shillong e-Symposium 2020

India’s North Eastern Region (NER) is a beautiful part of India. Extending down from the foothills of the Himalayas in the eastern range, it is surrounded by Bhutan, Bangladesh, China and Myanmar. It includes the eight States namely, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura, with the narrow Siliguri corridor in North Bengal called the “Chicken neck”. The region is described as a rainbow with extraordinarily diverse and colourful, serene and ageless characteristics. The region is rich in natural resources and a bouquet of biodiversity and unique traditions.In the view of this, Honourable Prime Minister Shri Narendra Modi has emphasised on transforming the NER into Natural Economic Zone.

In the last five years, the NER is witnessing a drastic change in the purchasing and selling patterns in various good and service segments. The E-commerce has significantly revolutionised the NER virtual market economy. Reports have stated that top E-commence companies are eyeing NER as a potential market that is growing ata phenomenal pace. Also, North-East Region situated in strategic location where the proximity is to

Prologuethe two fast-growing economic regions - East Asia and Southeast Asia. This endowed a significant international trade corridor, which is also one of the main reasons why to develop an efficient logistics sector in NER.

Logistics Network Management plays an imperative role. There is a need to build a wide distribution network with well-equipped IT-enabled infrastructure to track the movements of goods and better manage the logistics activities. To bring down the transportation cost and time in the region there is a need to build warehouse facilities in multiple locations in the States through PPP mode to facilitate short distance goods shipment. There is a requirement to further explore the potential challenges and opportunities in warehousing, logistics and distribution in North East India to explore innovative and cost-effective solutions.

The e-Symposium is conceived as a platform that brings together policymakers, scholars, institutions, corporates and civil society on one platform to explore the potential challenges, opportunities and future perspectives in Logistics, Warehousing and Distribution in North East Region of India.

LOGISTICS MANAGEMENT IN THE EMERGENT NORTH-EAST INDIA Strategic and Developmental Imperatives

Logistics in the North East Region of India

For improvement of connectivity and road infrastructure in the North Eastern Region, under Special Accelerated Road Development Programme for North East (SARDP-NE) a length of 6418 km have been approved and about 5273 km road has been sanctioned for execution at an estimated cost of Rs.57,518 crore. Under Pradhan Mantri Gram SadakYojana (PMGSY), a length of 23093.39 km of rural roads has been constructed in North Eastern States in last five years with an expenditure of Rs.10731.99 crore.

Railways are the economical mode of mass transportation in the country. However, it is difficult and expensive to setup rails in the hilly terrains of the North East Region. This explains for the nominal presence of railway lines in hilly states like Meghalaya, Manipur, Arunachal Pradesh, and Mizoram. In Nagaland and Tripura the railway route has been set up in the plain areas of the region. The Indian Railways is pursuing an ambitious plan to connect all North East state capitals with a rail network. The rail network in northeast is about 2600 km long and with the new projects will add another 880 km. This will give a big boost to the logistics and in turn to economic growth of the Northeast states.

to dominate the e-commerce industry. In December 2019, Snapdeal, Amazon and Flipkart experienced a 50% growth and around 90% increasing of orders from smaller towns and cities from NER such as Tezpur, Itaganar and Majuli. (Business Insider India, 2020). Likewise, as much as 15% of Fashionandyou’s revenue comes from the North-East. Upcoming agreement between Flipkart and Industries Department of Assam for providing the local artisans, Assamese jewelry makers, small tea growers, organic cultivators will provide a platform on the online market to sell their products globally(Economic times, Feb 2020).

The linkage between civil aviation sector and economic activity and its catalytic impact on general development is well recognized. The LokapriyaGopinathBordoloi International Airport at Guwahati, Assam considered the gateway to the Northeast states and it connects rest of India. It is the major hub for export of local products and tourism. The passenger movement at this airport has already crossed 6million mark in 2019.The Ministry of Civil Aviation has also planned to operationalize airports at Daporijo and Tezu in Arunachal. Nagaland has one the operational airport at Dimapur. A second airport is being planned for Kohima. Under the ‘Act-East Policy’, improved links with international neighbors is a priority. Bangladesh, Bhutan, Myanmar and TAR should be connected to Guwahati in addition to Bangkok. Another international airport for the southern part of North East Region in Agartala can be prioritized.

The e-commerce industry in NER is booming fast, much of the growth in the industry has been triggered by increasing internet (38 percent internet penetration) and smartphone users. Global companies like Amazon and eBay made their entry into the NER market that can be seen

In North East Region the roads are the centre of economic development. Road transportation is an important mode of travel in the hilly areas as other modes are either too expensive or difficult to construct. The ongoing infrastructure projects like the Bharatmala project; PMGSY for road connectivity, Kaladan Multi modal water transport, will provide and improve connectivity between Myanmar from Mizoram and rest of the country. The access from Chattogram and Mongla ports will significantly allow better connectivity for the trade of NER products such as food grains, horticulture, organic products, bamboo, tea, fish, jute cargo to be transported from North East India efficiently.

Bhupen Hazarika Setu, Assam Bharat Mala (Photo Courtesy: morth.nic.in)

North-East Region, strategic location situated in proximity to two fast-growing economic regions - East Asia and Southeast Asia. This endowed a significant international trade corridor, which is also one of the main reasons why to develop an efficient logistics sector in NER.India has built a port at Sittwe in Myanmar, which will be linked to Mizoram via a multi-modal transport network. Besides, a highway connecting India with Thailand via Myanmar could become operational by 2020 and may be expanded to Vietnam. India and Thailand recently signed pacts for port connectivity, adding meat to the Act East Policy and the Indo-Pacific vision (Economic Times, Dec 2019). Also, with the completion of East-West Economic Corridor (EWEC), regional connectivity between India and Southeast Asia becomes stronger. Trilateral Highway connects EWEC at Myanmar-Thailand border, further opening up prospects of value chain linkages between Northeast India and CLMVT (Cambodia, Laos, Myanmar, Vietnam, Thailand).

An initiative has been taken for setting up a river port at Sonamura sub-division of West Tripura to make Gomati River of Tripura navigable to transport light boats for carrying goods via Bangladesh through Meghna river of Bangladesh. The ongoing project on Railway extension in Manipur under the ambitious Mekong-Ganga Cooperation (MGC) project will enhance the cross-border trade between India and Myanmar through Moreh in Manipur. In addition to this, Trilateral Highway (Friendship Highway) is a highway under construction under India's Look East policy that will connect Moreh, India with Mae Sot, Thailand. Such initiatives in NER encourage better connectivity, growth of crucial trade channels and growing opportunity for the logistics industry.

The introduction of GST is proved to be a boon for the Indian Logistic Sector as it has cut down costs in both logistics and warehousing sectors. Levitation of taxes at a national level instead of individual states cut down on logistics cost and increase cross border transportation. GST implementation is a game-changing event for businesses and particularly for organized logistics players. As per World Bank estimates, delays are caused by roadblocks, checkpoints and other stoppages that could cut freight times by 20 to 30 percent and logistics costs by 30 to 40 percent. With proper GST implementation, this can boost India’s manufacturing sectors by almost 3 to 4 percent of net sales. The GST spur large warehouse related investors by logistics providers to derive cost savings from route and warehouse optimization. After GST implementation, there are a few warehouses, larger trucks on road while the overall number of vehicles will go down, greater adoption of a hub-and-spoke model in segments such as warehousing, cold chain, container freight stations and inland container depots. A hub-and-spoke model, with Guwahati, Agartala, Imphal and Dibrugarh as hubs and other destinations as spokes is an appropriate model for NER.

Opportunities ahead for International Trade

GST as a Game Changer for Logistics Sector

India - Bangladesh Border

The Dr. APJ Abdul Kalam Centre for Policy Research and Analysis is envisioned as a proactive embodiment of the philosophy of the late President Dr. APJ Abdul Kalam, of levering knowledge, technology and humanism to achieving Sustainable Development while also ensuring the goals of a just and equitable Social Order. The Centre was the outcome of a tripartite agreement between Indian Institute of Management, Shillong and Ministry of Development of North Eastern Region (MDoNER) and North Eastern Council (NEC) signed on 15th October 2016. The Centre aims to emerge as a state-of-the-art resource Centre to assist the states of North East India to plan their projects adequately, promote innovations, function as a repository of data and best practices in the region, and make policy recommendations.

Currently, the policy-related work in the development planning of six critical sectors in the North East states is in progress,viz., logistics, tourism, horticulture, handicraft, handloom and business process outsourcing. The Logistics sector of the Centre is currently focusing on understanding the AS-IS status of logistics complexities and challenges in NER and exploring on the growing role of logistics services to act as an enabler to different sectors like tourism, agriculture, handicraft, handloom, etc.

Dr. APJ Abdul Kalam Centre for Policy Research and Analysis, IIM Shillong

In today’s milieu, where a customer is too much aware of choices and needs a product at rock bottom price, the modern logistics have become the most important means to improve the efficiency of material flow, reduce distribution costs. Also, at the same time, the recent development of E-commerce has significantly contributed to the development of the logistics market, stimulated the advanced technologies related to logistics.

The Eight Essentials for World-Class Logistics Network

Policymakers see this region as a game-changer if the logistical challenges are addressed in North East India. There is a need to further explore the potential challenges and opportunities in warehousing, logistics and distribution in North East India to explore innovative and cost-effective solutions.

Essentials for World-Class Logistics Network

Time Event

1:40 – 1:45 PM Introduction of Dr APJ Abdul Kalam Centre for Policy Research and Analysis

Prof. Keya Sengupta, Centre Coordinator

1:45 – 2:45 PM

Speakers

Ms. Sanjukta Dutta, Etash Enterprise

Prof. Sanjeeb Kakoty, Associate Professor, IIM Shillong

Shri. Navin Kumar, Adviser (Transport and Communication), North Eastern Council, Shillong

Shri. Shantanu Bhadkamkar, President, Association of Multimodal Transport Operators of India

Shri. V. Kalyana Rama, Chairman and Managing Director, CONCOR

Moderator

Shri. Atul Kulkarni, Board Member, IIM Shillong

02:45 – 03:00 PM Valedictory Address by

Shri. Sarbananda Sonowal, Hon’ble Chief Minister of Assam

03:00 – 03:05 PM Vote of Thanks

Prof. Sanjita Jaipuria, Sectoral Coordinator: Logistics

Technical Session

Session PlanIIM Shillong e-Symposia Series

11:45 am - 01:35 pm, 11th July, 2020

Session: 1:40 -3:05 pmOpening up of Opportunities in NER

Time Event

11:45 – 12:15 PM Activation of Link for the e-Symposium

12:15 - 12.20PM e-Symposium Initiation(Sectoral Co-cordinator, Dr. APJ Kalam Centre)

12:20 - 12:30 PMWelcome Address by

Shri. Shishir Bajoria,Chairman, Board of Governors, IIM Shillong

12:30 - 12:45 PMTheme Setting:

Shri. Tushar Jani,Chairman, SCA Group of Companies

12:45 - 1:00 PMSpecial Address:

Dr. Amita Prasad, IAS, Chairperson, Inland Waterways Authority of India (Ministry of Shipping)

1:00 - 1:30 PM

Address by Chief Guest

Shri. Nitin Gadkari, Hon’ble Minister for Road Transport & Highways and Minister of Micro, Small and Medium Enterprises, Government of India.

1:30 - 1:32 PM Vote of Thanks by Prof. D.P. Goyal, Director, IIM Shillong

Expected outcome of the IIM Shillong e-Symposia Series

With the abundant bio multiplicity, India’s North-East Region has phenomenal potential to grow exponentially. However, if we glance upon reality, the picture is not so bright. One may ponder, even with such huge potential, why is North East Region’ produce is not succeeding in traveling to markets across India and the world? What are the inhibitors that are not allowing these States to exploit economic opportunities of the natural ecological advantages? What are the innovative and cost-effective

solutions we can employ to improve logistics infrastructure? What roles policymakers, NEC, DoNER and knowledge partners like IIM Shillong can play to exploit the best from the current situation? How to synergize the efforts of various stakeholders and devise favorable policies? How process engineering can help businesses to fly? Do we need to think disruptively to attain innovative solutions? These are a few questions the e-symposium would like to address.

Further, the expected outcome of the Logistics e-symposium is togenerate some of the future course of action in the planning of the activities of Logistics sector of the Dr APJ Abdul Kalam Centre for Policy Research, to contribute to the body of knowledge by publishingreports on the Current Status, Challenges, Opportunities and Policy Recommendations. Also, thee-symposium further expected to focus on the key areas of development planning, policy formulation, strategizing and analysis of Logistics in North East India.

Symposium Organizing Committee• Prof. (Dr) Keya Sengupta

Centre Coordinator, Dr. APJ Abdul Kalam Centre

• Prof. Rohit Joshi Sectoral Coordinator, Logistics

• Prof. Sanjita Jaipuria Sectoral Coordinator, Logistics

• Dr. Bhaskar Kumar Kakati Centre Manager

• Ms. Kiran Sharma Research Assistant

Registration for the Symposium

Participants Participants expected for this meeting include Representatives of States, Representatives from NEC, Representatives from the Industry, Startups, Stakeholders from various Institution that are active in North East, Subject Experts on North East India, Board Members and Faculty Member of IIM Shillong, Students and Alumni of IIM Shillong. The event aims to attract all relevant stakeholders.

For Participation Register Here

Indian Institute of Management Shillong

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Nongthymmai, Shillong – 793014

Phone: +91 364 – 2308145 / 8000, +91 - 81319 83051

Email-id: apjcentre@iimshillong.ac.in

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