Terms in New Policy for ICDs Need to be Reviewed – ACTO

24/Mar

The Association of Container Train Operators (ACTO) has requested the Finance Ministry to review the recent policy on setting up new Inland Container Depots (ICD). ACTO noted that some of the terms in the policy – which defines and restricts areas where new ICDs can be set up — will negatively impact competition. 

In November’20, the Central Board of Indirect Taxes and Customs categorized Indian states and UTs into three groups based on no. of container handling facilities available. States with adequate ICDs were classified as Red Zone, where approvals for setting up new terminals may be discouraged; Blue zone included those with fewer ICDs, where product specific container handling facilities could be considered. The ones with low container depots were classified as Green Zone, where new proposals will be encouraged.

The Red Zone includes Punjab, Haryana, Delhi, Rajasthan, Gujarat and Maharashtra. Blue Zone includes Uttarakhand, Uttar Pradesh, Chhattisgarh, Karnataka and Kerala. Green Zone includes Bihar, Himachal Pradesh, Jharkhand, Arunachal Pradesh, Assam, Bengal, Nagaland, Jammu and Kashmir. The government also set distance-based restrictions on setting up of ICDs within a 100-km-radius and Container Freight Stations (CFS) within 200 km of a seaport. 

Apart from container train operators, the new rules were considered as a hindrance by Dedicated Freight Corridor Corporation of India as well. The ACTO believes that this move will reduce new competition from coming up, which will in turn, lead to monopolizing of service charges & service levels by existing operators. This might also affect investment bids and slow down the pace of trade-based infrastructure development where demand exists. The government should introduce special incentives for increasing investment in demand deficit areas instead of restricting areas with adequate container depots.