free trade warehousing zones
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FREE TRADE WAREHOUSING ZONES
Submitted by:-Ayush Dayal
Marketing – OperationsBatch 2008-10
P.R.N. No- 08020441017
OBJECTIVE – To study the concept of F.T.W.Z and its relevance in the current scenario
RESEARCH METHADOLOGY – Primary interviews and secondary data research
INTRODUCTION
Approximately 10-15 percent of a product's cost represents logistics-related costs
Globally, the logistics industry is valued at US$3.5 trillion and the Indian logistics industry is currently estimated at US$90 billion
India ranks 39th in terms of the logistics performance index and indicators
India spends US$1,148 in handling costs to import one cargo container and US$820 to export a container
India spends 13% of its GDP on logistics www.google.com/worldlogisticsreport-2010
• Source – colliers yearly report – 2009
Logistics Industry - Overview
Growing at a rate of 30-40 percent per annum
India has a total warehousing space of approx 1,800 million sq ft, of which only 8 percent (144 million sq ft) is in the organised sector
Source – colliers yearly report 09
POLITICAL
ECONOMICAL
SOCIAL
TECHNOLOGICAL
LEGAL
ENVIRONMENTAL
P.E.S.T.L.E Analysis
Land woes
Infrastructure
Unorganised sector
Inadequacy in the number of facilities available
Taxation
Road Blocks
The Government of India had announced in the Foreign Trade Policy 2004-09 to set up Free Trade and Warehousing Zones (FTWZ) to create trade related infrastructure to facilitate the import and export of goods and services with freedom to carry out trade transactions in free currency.
On June 23, 2005, the Parliament of India passed the Special Economic Zones Act 2005 and on February 10, 2006 Government of India notified Special Economic Zones Rules 2006.
The Free Trade and Warehousing Zones (FTWZ) is a special category of Special Economic Zone and is governed by the provisions of the SEZ Act and the Rules.
Source – www.ftwz.com
FREE TRADE WAREHOUSING ZONES
FTWZ’s are envisaged to be Integrated Zones to be used as ‘International Trading Hubs’
Each Zone would provide ‘World Class' Infrastructure for :
◦ Warehousing for various kinds of products
◦ Handling and Transportation Equipment
◦ Commercial office space
◦ All related utilities –telecom, power, water, etc
One stop clearance of Import and Export of goods
FTWZ would be a key Link in Logistic and Global Supply chains –servicing both India and the Globe
Source – www.ftwz.com
Customised categorised warehouses ~ chemicals, food, electronics, oil, etc.
Sophisticated freezer / cooler facilities
Break bulk, containerised, and dry cargo storage facilities
Controlled humidity warehouses
Enhanced transportation facilities
World-class information system for cargo tracking
Office space
Support facilities and amenities like medical facility, canteen services, business centres
FTWZ -Facilities
FTWZ -Utilities
Rain water and storm water drainageEffluents disposal system
Telecom cablesPower supply system
Security hutsContainer stacking area pavementIn plant maintenance workshops
General high mast lighting
Horticulture and landscapingBoundary wall
Water supply and sewerage
Administrative building and officeAncillary building
CanteenServices buildingCovered parking
Roads
FTWZ POSITIONING
Logistics and Distribution Centre
Integrates various aspects of logistics
operations
Provides “Free Zone” environment
Provision of high quality infrastructure
Principally governed by the SEZ Act 2005 and SEZ Rules 2006
100% Foreign Direct Investment is permitted in development and establishment of FTWZ
FTWZ is a deemed foreign territory
Minimum size of the warehousing stipulated at 1 lakh sq mtrs
All benefits available to the SEZs shall be applicable to the FTWZs
The FTWZ shall be under the administrative control of the Development Commissioner (DC)
www.google.com/sezact2005
FTWZ -Relevant Laws
FTWZ -Benefits
Fiscal and Regulatory Benefits
• Duty Deferment Benefits
• Income tax(section 80IA) and Service Tax exemptions for developers and users
• Excise Duty Exemption
Infrastructure Benefits
• Single Product Storage Facilities
• Shared warehousing
• Shared Equipments
Administration Benefits
• Delivery Time
• Support Facilities and Effective Management
FTWZ –Benefits to
Region / State
Export oriented
Boost to all-round economic activity
Competitiveness of industries
Attractiveness of support/ancillary
industries
Employment potential
FDI inflow
MAJOR HUBS IN INDIA
www.google.com
THE 3 I…...S
Mr. Ajay Mittal (C.M.D, Arshiya
Logistics)
Mr. Sagar Bhandare (M.D,
Shree Constructions)
Mr. Bipin Joseph (head, logistics and
warehousing, A4 Global Logistics)
After the fiasco of 2008-09, LEAN MANUFACTURING is the shout out
Improved THROUGHPUT is the key word for manufacturers now
For INDIA, time and cost constraints are the biggest hurdles in this
GOVT. agencies and red tapism
Need for a viable integrated system of warehousing and logistics to avoid the same
Key findings
The art of logistics - integrate the strategic, operational, and tactical efforts of businesses
-ensure that the right material reaches the right place at the right time
The improvement of the taxation system, infrastructure and transparency in the system will pave the path of success and bright future for the logistics and warehousing sector
Conclusion
F.T.W.Z’s are the need for the future for the sheer number of benefits they provide
Improvements in both cost and time are the key drivers for this concept
Location is the most important consideration along with the connectivity
Commitments need to be strictly adhered to as the warehousing companies sign forward contracts with their clients
Thank you
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