India Develops ADB-Backed Grading, Rating Standards for Warehouses, Cold-Chain Facilities

India Partners with ADB to Establish Grading Standards for Warehousing and Cold Chains

The initiative aims to enhance operational efficiency and access to credit for logistics facilities across the country.

Significance of the Grading Standards

The development of grading and rating standards for warehouses and cold-chain facilities is a crucial step towards improving the logistics infrastructure in India. Pankaj Kumar, Joint Secretary at the Department for Promotion of Industry and Internal Trade (DPIIT), emphasized that these standards will not only streamline operations but also facilitate easier access to government incentives and credit for graded facilities. This initiative is particularly significant as it follows the release of two sets of warehouse standards and guidelines by DPIIT, which aim to enhance operational efficiency and compliance within the sector.

Regulatory Framework Under Consideration

A key aspect of this initiative is the regulatory framework that will govern the grading and rating process. The government is yet to finalize whether a government body or industry associations will oversee the ratings. This decision is critical, as it will determine the credibility and acceptance of the grading system among stakeholders. A well-defined regulatory framework could enhance trust and encourage more facilities to participate in the rating process, thereby improving overall standards in the logistics sector.

Integration with State Logistics Policies

The DPIIT is also working closely with state governments to incorporate warehousing and cold-chain facilities into state logistics policies. This collaborative effort aims to develop city logistics plans that encompass various components of the logistics ecosystem, including warehouses, dark stores, and cold storage facilities. By integrating these elements into state policies, the government seeks to create a more cohesive and efficient logistics framework that can support economic growth and development.

Future Directions: Multimodal Logistics Parks

In addition to the grading standards, the DPIIT is drafting guidelines for Multimodal Logistics Parks (MMLPs), which are designed to enhance the efficiency of logistics operations. Notably, warehousing and cold chains occupy approximately 70% of the area in these parks. The new guidelines are expected to promote value-added services such as labeling, packaging, redistribution, and digitalization, further enhancing the logistics sector’s capabilities and competitiveness.

Key Highlights

• India is developing grading and rating standards for warehouses and cold-chain facilities in collaboration with ADB.
• The initiative aims to improve operational efficiency and access to credit for graded facilities.
• Regulatory oversight for the grading process is yet to be determined, with options including government or industry self-regulation.
• DPIIT is integrating warehousing and cold chains into state logistics policies to enhance overall logistics infrastructure.
• New guidelines for Multimodal Logistics Parks are being drafted to promote value-added services.

Investor Note: The establishment of grading standards for warehouses and cold-chain facilities could significantly enhance the logistics sector’s efficiency and attractiveness to investors, particularly as the government seeks to modernize and streamline operations within this critical industry.