FTWZ – The Force That’ll Boom Indian Economy
The Indian economy is undergoing a transformation; new opportunities are dawning upon different industries and one such lucky arena is the logistics and warehousing sector. The Indian government has granted the logistics industry ‘Infrastructure Status’ as part of its efforts to boost the country’s infrastructure. And for that free trade zone in the country is the one that attracts both domestic and foreign investors with its potential to expand in the times to come.
A free trade zone (FTZ), also called foreign trade zone refers to an area within India or any other country where goods from anywhere in the world can be landed, looked after and re-exported with least intervention of the customs authorities. Considered an international territory/boundary within India, a foreign trade zone primarily comprises of state-of-the-art logistic warehouse facility and is a port with excellent connectivity by rail, road or sea.
And most importantly, these mega trading hubs give excellent opportunities with each site employing approximately 15,000 to 30,000 people. The logistic and warehousing sector in the country is undergoing a massive transformation from being those traditional unorganized players to full-fledged logistics service providers offering end-to-end supply chain services. This has directly impacted and boosted the growth of trade in India.
India, in her efforts to develop the infrastructure and become self-sufficient, has developed initiatives like ‘Make-in-India’ and has also transformed cities into their smart versions. Not just metropolitan cities but Tier I and II cities are also witnessing rapid growth and huge potential for logistic warehouses and ancillary services, including any foreign trade zone in all probability. It is estimated that by 2025, tier I and II cities will account for 45 per cent of India’s consumers. As such organized business wings, like the logistics industry is spreading its wings beyond major urban places and escalating its footprint in the market.
A foreign trade zone comes with ample conveniences; each of them gives a host of benefits in the form of duty deferments and faster customs clearances, packaging, allowance of re-packaging and re-exporting, customized warehousing, dry cargo storing that can be availed by importers, exporters and also re-exporters.
While foreign trade zones will benefit endless industries, the sectors that will benefit the most from FTWZs are big retail chain, Pharmaceutical Contract Manufacturers, Medical Devices Company, automobile manufacturers, Defence, Aviation, IT hardware and electronic companies including mobile handset companies. And as we all know, India is the second-largest consumer of smartphones in the world, so we can imagine how big an impact a free trade zone can make on our economy.
Every free trade zone and its logistic warehouse have tremendous potential to boost the import and export trade in India. An optimized, modernized and efficient supply chain not only improves the ease of doing business, but also cuts down the costs of manufacturing and more working capital in hand.
Moreover, it acts as a catalyst in ensuring that both urban and rural consumption growth is improving due to a better access to the market. India is a nation that has huge potential for an economic boom and FTWZs will definitely play one of the most significant roles in boosting import and export trade, in terms of both revenue and volumes.