Farmer protests may increase logistic costs by up to 10%: CII

The CII on Monday said the ongoing farmers’ protests may lead to about 8-10% increase in logistics costs due to detours with consignments taking 50% longer to reach destinations in States like Punjab, Haryana, Rajasthan and Delhi-NCR.

“The agitation by farmers in many parts of India has led to disruption in supply chains and logistics. This will have a bearing on the economy over the coming days and may impinge the ongoing recovery from the economic contraction due to COVID-19,” the industry body said.

“Around two-third consignments in transit are taking 50% extra time to reach destinations in the above States. In addition, the transport vehicles are forced to travel up to 50% longer to reach Delhi from the warehouses in Haryana, Uttarakhand and Punjab. This may push logistics cost by up to 8 to 10%,” it said, adding that many companies in the industrial belt surrounding Delhi are facing labour shortages as people struggle to reach production facilities from neighbouring towns.

Nikhil Sawhney, Chairman, CII Northern Region, said, “The agitation requires an immediate amicable solution as it is impacting not only the economic growth but also putting a huge dent to the supply chain which is affecting the large and small industries alike.”

The effect is more acute for industries in the hilly regions of Himachal Pradesh, Uttarakhand and Jammu and Kashmir which are dependent on goods transported by road. There is also uncertainty around the transportation of farm products to the major markets of Delhi-NCR. It could lead to significant losses to the farm sector in these States.

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