Criteria for new ICDs/CFSs/AFSs - CBEC's Customs Manual 2023 - Customs

4. Criteria for new ICDs/CFSs/AFSs 4.1. Geographical Criteria for approvals 4.1.1. It has been seen in the past that the tendency of developers to set up facilities in few selected areas led not only to proliferation at those centers but also has resulted in investments being made near big cities/ports, far from the manufacturing/exporting units. Moreover, such distorted penetration results in higher costs for inland units apart from creating manpower issues for the departments. 4.1.2. Therefore, it has been decided to group the country in three types of areas for the purposes of opening of new ICDs/CFSs as under following: Green Zone: States low on ICD/CFS infrastructure. These will be open for proposals (Assam, Arunachal Pradesh, Bihar, Himachal Pradesh, Jharkhand, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Telengana, Tripura and West Bengal, and Union territories of Jammu and Kashmir and Ladakh); Blue Zone: States where the proposals can be accepted only for specific trade generating locations with no existing facilities or with over utilized facilities (Andhra Pradesh, Chattisgarh, Goa, Karnataka, Kerala Odisha, Uttarakhand, and Uttar Pradesh and Union Territories of Diu and Daman, Pudhucherry); and Red Zone: The identified states have adequate ICD/CFS infrastructure. These may be closed for any new CFSs development indefinitely. However, in exceptional cases IMC may approve the setting up of ICDs in trade generating locations with high export import potential and need of new facilities (all the states and union territories not listed in Green and Blue Zones). 4.1.3. Distance of ICD from ports - Rail transport is price competitive with road transport when the lead distance is more than 200 kms. Rail connected ICDs are favored at hinterland locations with lead distances up to 1,500 kms in north India. The development of ICDs within 200 kms of a connecting/Nearest serving seaport shall be discouraged. The measure is expected to further encourage DPD DPE movement between hinterland ports. For calculation of distance, the chargeable route by rail and shortest road (National Highway / State Highway) from serving port shall be considered. This rule shall be applicable across all geographical zones. 4.1.4. Distance between ICDs - No Greenfield ICD shall be permitted to be established within 100kmsdistance from existing ICD. Distance will be referred as chargeable railways route (both directions) between ICDs and shortest road distance (National Highway / State Highway, both directions) in case of road linked ICD. This rule shall be applicable across all Geographical zones. 4.1.5. Development in States with low Logistics Infrastructure - To support infrastructure development in states with limited logistics infrastructure, priority should be given to Identifying and promoting ICD/CFS/AFS facilities where presence of such facilities is limited. These are clustered in Green Zone as proposed above. IMC can give relaxation on Distance rules in Green Zone. 4.1.6. National Logistics Action Plan/Policy - The approval and notification of all new ICD/CFS, including existing and new MMLPs will be processed in consonance with the national logistics action plan/policy. 4.1.7. Inland National Waterways - Development of ICDs based on Inland National Waterways as mode of transportation will be encouraged with relaxation being given on Geographical Zone Distance rules. 4.1.8. Railways Freight Corridors - Approval of Greenfield ICDs directly along/Linked with DFCs (Eastern Western DFCs and any new operationalized railways freight corridor) will be accorded with no more than one ICD directly connected with these corridors within chargeable distance of 100 kms in both directions. It is expected that some of existing ICDs will get connected directly to freight corridors and while some will operate in Hub Spoke model in future. With priority of increasing utilization of Freight corridors as they operationalize and lowering the logistics costs, IMC can accord approvals to these facilities in any zone while maintaining distance rules on the corridors. 4.1.9. Exceptions - IMC can approve creation of additional facilities near existing ICDs (all 3 zones) if the demand exceeds the existing capacity of ICDs/CFSs in trade generating location/area. This can be determined by analyzing the existing utilization of ICDs in designated trade generating location/area. 4.1.10. In no case a new CFS shall be set up which is linked to an ICD. Only CFSs connected to ports in the permissible Zones (as mentioned above) shall be allowed after considering existing capacity and utilization parameters. 4.1.11. AFSs are relatively new to India, hence, in the case of AFSs, the IMC while considering the application, will only take into account the demand-supply gap and take appropriate decision. 4.2 Volume 4.2.1. The facility must be economically viable to manage and attractive to the users, to the railways for full train load movements; to other transport operators; seaports; shipping lines; freight forwarders etc. and must operate at certain minimum amount of traffic. The applicants must therefore study carefully the viability of the project from the point of view of the TEU traffic availability. 4.2.2. In the time of growing international trade, the creation of any infrastructure facility must commensurate with the generation of demand in actual terms. This is particularly important as such facilities have a long gestation period for being fully operationalized. Accordingly, the minimum threshold performance shall be 7200 TEUs/consignments 1 per year (two way) for an ICD and 1200 TEUs/consignments per year (two way) for a CFS. However, no such threshold performance is prescribed for an AFS. 4.3 Land 4.3.1. The minimum area requirement is seven hectares for ICD having minimum area of four hectares as Customs Notified Area and minimum one hectare nominated for DPD DPE nominated space. For states in Green Zone, ICD with three hectares for customs notified area and one hectare for DPD DPE may be considered. The minimum area requirement shall be two hectares for a CFS. For AFS 1000 Sq. meters of covered area each for imports and exports respectively shall be made available. 4.3.2. Ownership of Land - The applicant must have the legal rights over the land which is proposed for ICD/CFS construction. If the land is not owned and the land is leased, the lease agreement with lessor must be for period of 30 years. Change of Land Use certificate, wherever required shall accompany the application and land should be free from acquisition proceeding at date of application. The land parcels should be contiguous with only exception for setting up nonbonded storage facility. 4.4 Other Criteria 4.4.1. Legal entity- The applicant must be a legal entity in India under applicable law. The entity must possess a valid GST registration and should have been operating for a minimum period of three years. 4.4.2. Prior experience - The applicant must have prior experience of operating as CCSP or should have other trans-border logistics experience such as logistics service provider including customs brokers, transporters, freight forwarders, shipping lines and port terminal operators.