Introduction
Though not widely known, the state of Uttar Pradesh (UP) is making significant strides in revolutionising its logistics and warehousing sector. To facilitate rapid growth of th sector, the UP Warehousing & Logistics Policy 2022 provides a comprehensive framework It offers a myriad of incentives and subsidies for businesses, making UP an attractive destination for logistics and warehousing projects.
Front-End Subsidies
Before the commencement of commercial operations, eligible projects stand to benefit from several incentives offered under the policy:
Stamp Duty Exemption: UP offers full stamp duty exemption for storage facilities in Bundelkhand and Purvanchal, 75% exemption in Madhyanchal and Paschimanchal , and 50% exemption in GBN( Gautam Buddha Nagar) and GHZ ( Ghaziabad).
Support for Infrastructure: The policy extends a 100% subsidy for dry ports, logistics parks, and truckers’ parks. Land use conversion for all eligible projects can benefit from a 75% concession, and development charges are exempted by 75%.
Ground Coverage: Storage facilities and dry ports can utilize up to 60% ground coverage, while logistics parks can maintain an overall ground coverage of 60%.
Back-End Subsidies
Upon commencement of commercial operations, eligible projects continue to receive incentives:
Capital Subsidy: Storage facilities can benefit from a 15% subsidy up to INR 5 crore (anywhere in UP) and up to INR 10 crore in designated logistics zones. Dry ports and logistics parks enjoy a 25% subsidy, up to INR 25 crore (anywhere in UP) and up to INR 50 crore in designated logistics zones. Berthing terminals receive a 25% subsidy, with a maximum of six terminals. Cargo terminals, whether GCT approved or not, can avail of a 20% subsidy, up to INR 15 crore.
PPP Land Allotment: Developers of cargo/berthing terminals can secure land on a PPP basis for a 35-year BOOT model. Additionally, they are granted a 100% exemption from electricity duty for ten years.
Quality Certification: Storage facilities can receive reimbursement of quality certification costs, up to INR 5 lakh per project. A 25% purchase subsidy for inland vessels, subject to a maximum of 50 vessels, is also available.
Skill Development Subsidy: The policy supports skill development within the sector.
Other Benefits
The UP Warehousing & Logistics Policy 2022 provides industry status to units defined in terms of land use, eliminating the need for land use change from commercial to industrial. Industrial FAR (Floor Area Ratio) is applied to such projects, and industrial land rates are adopted for land allotment in areas reserved for industrial activity.
Fast-Track Land Allotment: Logistics parks, as defined in the policy, with a minimum capital investment of INR 500 crores, qualify for fast-track land allotment. In industrial areas, where direct land allotment is allowed, the concerned Industrial Development Authority (IDA) will directly allot land to the investor. In areas where land is allotted through auction, land is allocated directly at the base rate of the plot plus an additional 15% of the base rate.
Development of Logistics Clusters: In areas outside any IDA/Development Authority or Urban Local Body, the state of UP will acquire land 1.25 times the required land for eligible units. This approach allows for the development of logistics clusters.
Designated Logistics Zones: Strategic areas in proximity to key infrastructure projects, such as the Western Dedicated Freight Corridor (WDFC), Eastern Dedicated Freight Corridor (EDFC), expressways, and the Jewar Airport, will be notified as Designated Logistics Zones. Additional incentives are proposed for investment in these zones.
Conclusion
The UP Warehousing & Logistics Policy 2022 represents a giant leap forward in making Uttar Pradesh a logistics and warehousing hub. With a wide range of front-end and back-end subsidies, fast-track land allotment, and other benefits, UP is poised to attract and nurture logistics businesses, promoting economic growth and employment in the state. This policy is a testament to the government’s commitment to fostering a business-friendly environment and strengthening the logistics and warehousing sector. It’s an exciting time for businesses to explore opportunities in UP and be part of its impressive growth story.
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