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GST to boost business in India's 'Zero Mile' City Nagpur

Nitin Gadkari has said the government has sanctioned Rs. 25,000 crore worth of projects linked to Nagpur

Policy Pulse
Publish Date: Oct 27 2016 3:29PM | Updated Date: Oct 27 2016 3:31PM

GST to boost business in India's 'Zero Mile' City Nagpur

A dusty provincial city of 2.5 million, Nagpur is at the geographical heart - India's zero mile markers. It is also at the heart of the action now as the government prepares to roll out the biggest fiscal overhaul since independence.


GST, a national value-added tax that will replace a proliferation of local levies. The Goods and Services Tax itself, due to be introduced in April next, could well see delays.


But Nagpur is already benefiting from a change that will allow companies to move goods across state borders without being hamstrung by local levies.


It’s all started when Future Group opened a warehouse on the outskirts of Nagpur three years ago to supply its supermarkets; the building was surrounded by dry, barren fields. Now it is only one in an expanse of distribution centres, storage depots and factories.


Property prices have surged as companies from Amazon to tractor maker John Deere have set up central facilities in the city to cut down on transport costs.


"The advantage of Nagpur is simple. All metro cities in the country are all about 900 km from there," said Rakesh Biyani, Future Group's joint managing director.


Consultancy Alvarez & Marsal, which specializes in turnarounds and performance improvement, estimates firms, can cut logistics costs by 25 per cent if they consolidate their warehouses in Nagpur.


Land prices are up in Nagpur by as much as a fifth since April, says real estate agents. They can see it coming as developers snap up farmland. Nagpur has seen ambitious plans. India was promoting plans to build an international metropolis here.