Rajasthan priorities trade, palit

1. Enhancing Exports and Trade
Amitendu Palit
Rajasthan Priorities conference, Jaipur June 8 -11

2. 1st analyzed solution
Development of an Inland Container Depot (ICD) and Container Terminal

3. Definition and Justification
ICDs, or Dry Ports, are ‘….logistics centre connected to one or more modes of
transport for the handling, storage and regulatory inspection of goods moving in
international trade and the execution of applicable customs control and
formalities” (Article 1 of Inter-governmental Agreement on Dry Ports)’
Apart from connecting landlocked hinterland to global trade, Dry Ports enable
multimodal transport operations reducing congestion on specific modes of traffic
Some key dry ports in Asia : Yunnan Tengjun (China), Yiwu (China), Khorgas
(Kazakhstan), Sejong (Korea), Sungai Duku (Indonesia), Lard Krabang
(Thailand), Riyadh (Saudi Arabia), Dadri (India) Birganj (Nepal), Sialkot
(Pakistan)
An additional ICD in Rajasthan, equipped with container terminal, would benefit
exporters by bringing down logistics cost and incentivizing exports.

4. Description
To add to existing Dry Ports in Rajasthan - : Jodhpur (Bhagat Ki Kothi), Jaipur
(Kanakpura) and Kathuwas
To be developed in sync with CONCOR’s existing network of dry ports and feeder
connections with Indian Railways
To be located in close proximity to Delhi Mumbai Industrial Corridor (DMIC) for
enabling forward and backward linkages.
To come up over 120 hectares -15% larger than Dadri ICD
Facility expected to have throughput capacity of 5,00,000 TEU
Initial capacity utilization pegged at 60% with annual throughput growth of 5%

5. Projected Costs: 20 Year Span
FIXED COSTS: LAND, TRAIN LICENSE, INFRASTRUCTURE;
& OPERATING COSTS (INR CRORE)
YEARS 1-5: FIXED COSTS; YEARS 6-20:
OPERATING COSTS;

6. Projected Benefits: 20 Year Span
• Initial revenue expectation – INR
400 crore
Assessment benchmarked to Dadri
ICD throughput-revenue performance
Can increase further from more
capacity utilization arising from
Rajasthan’s strong efforts in improving
Doing Business

7. 2nd analyzed solution
Establishing a Free Trade Warehousing Zone

8. Definition and Justification
Free Trade Warehousing Zones (FTWZs) are customised logistic facilities for
seamless movements of goods and services with the freedom to carry out trade
transactions. They are located close to seaports/airports/ dry ports.
FTWZs in India emphasized since FTP 2004-2009. To be set up over minimum
area of 100,000 sq meters. FTP 2015-2020 encourages these as ‘international
trading hubs’.
Academic literature and evidence supports FTWZs for encouraging exports as
FTWZs reduce logistic costs and facilitate trade.
Since the first FTWZ – Arshiva in Panvel, Maharashtra - more coming up.
Warehousing and logistic capacities in Rajasthan can greatly improve from a
FTWZ

9. Description
To be located in close proximity to Delhi Mumbai Industrial Corridor (DMIC) for
enabling forward and backward linkages.
To come up over 125 acres –midway between Arshiya in Maharashtra and
Nanguneri in Tamil Nadu
FTWZs are characterized by high capital costs for development and operating
expenses.
Expected to operate at 70% capacity, i.e. available warehousing space, due to
strong demand of warehousing for trade cargo

10. Projected Costs: 20 Year Span
FIXED COSTS: LAND, DEVELOPMENT; &
OPERATING COSTS (INR CRORE)
YEARS 1-6: FIXED COSTS; YEARS 7-20: OPERATING
COSTS;

11. Projected Benefits – 20 Year Span
Initial revenue – INR 275 crore,
expected to rise by 2% each year
Estimates based on indicative
warehousing charges and strong
capacity utilization of 70%
Benefits remain below costs till Year
11.
Might remain lower for more years if
capacity utilization falters

12. 3rd analyzed solution
Scientific testing and certification facilities for organic product exports

13. Definition and Justification
Rajasthan 3rd largest organic food producing state after MP, HP
Lesser use of pesticides due to favourable climatic conditions conducive for
organic farming.
Rajasthan’s proficiency in oil seeds production makes it well positioned to grow
into an organic food export hub with oil seeds comprising most of India’s organic
exports.
Rajasthan State Seed and Organic Certification Agency (ROCA) accredited by
APEDA for certification
Empirical research points to lack of adequate certification facilities as a constraints
for organic exports as lack of certification invites NTMs in global markets
We expect additional modern testing and certification facilities to encourage
substitution from domestic production to exports.

14. Description
To add to existing certification facilities such as those under ROCA, but to be
organic product-specific
To be developed in line with the norms laid out by Food Safety and Standards
Association of India (FSSAI)
To be located in close proximity to capital Jaipur.
To come up over 5 acres

15. Projected Costs: 10 Year Span
FIXED COSTS: LAND & BUILDING, LAB &
EQUIPMENT; & OPERATING COSTS (INR CRORE)
YEARS 1-3: FIXED COSTS; YEARS 4-10: OPERATING
COSTS;

16. Projected Benefits – 20 Year Span
Initial revenue – INR 13 crore,
expected to rise by 5% each year
Estimates based on expected
substitution of organic food produce to
exports from domestic consumption
Benefits exceed costs from Year 4.
Might be higher if international price
premiums increase

17. Summing Up
BCR (5% DISCOUNT RATE)
Intervention Cost (INR
crore)
Benefit
(INR
crore)
BCR Quality of
Evidence
1 3,137 4,853 1.5 Strong
2 3,007 2,736 0.9 Strong
3 50 75 1.5 Strong
TAKEAWAYS
Interventions 1 and 2 have
operating costs > fixed costs.
Greater capacity use and more
revenues can alter BCRs
Intervention 3 : low-hanging fruit
Policy benefits to be
distinguished between those
yielding returns over medium and
longer terms (i.e.1 & 2) vis-à-vis
those in much nearer term (i.e.
3).