Delhi-Mumbai Expressway: India’s push to become an industrial powerhouse

New Delhi, February 23

The 1,386-km-long Delhi-Mumbai Expressway (DME) is just the kind of colossal logistical push that India needs to emerge as a global manufacturing hub. A trip along the newly-inaugurated first stretch between Delhi and Jaipur on the eight-lane carriageway that will eventually spiral across 15,000 hectares linking manufacturing clusters across six key north and western Indian States revealed enthusiasm and anticipation in the industrial and trade centres along the way.

Among industry owners in auto components, biotechnology, chemicals, pharma, engineering goods and textiles in clusters such as Sohna, Manesar, Palwal and Alwar, the prospect of reduced travel time and distance and consequent less fuel costs has triggered fresh conversations about how their goods and wares will become more competitive in the days to come. Fuel accounts for 45-60 per cent operating cost of a truck with average mileage being around four km a litre (fully loaded). So reduced travel time means costs cut by staggering margins. Analysts thus rightly observe that this large-scale, access-controlled greenfield expressway is a serious attempt to remodel logistics and transport — mainstay of a manufacturing economy.

This large-scale, access-controlled greenfield expressway is a serious attempt to remodel logistics and transport — mainstay of a manufacturing economy | Photo Credit: KAMAL NARANG

The Delhi-Dausa section, said Crisil Market Intelligence and Analytics Director Akshay Purkayastha, will act as an alternate high-speed route for commercial vehicles using NH-48 between Delhi NCR and Jaipur, and will reduce travel time from around five hours to about three-and-a-half hours.

“The increased connectivity between these economic clusters, districts in the hinterland (such as Nuh and Dausa) and the Delhi NCR, will provide easier access to new markets improving trade prospects,” he added.

Purkayastha’s analysis is validated by the business-owners on the highway.

Voices from the ground

According to Arun Kumar, whose enterprise near Alwar manufactures spare parts for large generators, his transportation costs will come down by a minimum of 10-15 per cent.

“First, we get trucks at cheaper rates. The second thing is that currently it takes three-four days for the components to be delivered at a company’s doorstep in a place like Vadodara. This time will easily come down by 50 per cent,” Kumar told businessline.

Kumar had traveled on the DME to get a feel of how the travel time gets drastically reduced by the new expressway. “This is very beneficial for long-distance transportation of goods,” he said.

The DME will not only boost industrial potential, but also transform the real estate sector across towns and cities leading to higher demand for commercial and industrial properties.

The trickle-down effect of infrastructure spending is not lost on the government. On February 12, Prime Minister Narendra Modi, while inaugurating the 247-km Delhi-Dausa-Lalsot section of the DME, said that when investments are made in highways, railways, ports, airports, optical fibre cables, digital connectivity, construction of pucca houses and colleges, “every section of the society is empowered”.

Manufacturing push

Purkayastha of Crisil said the expressway will smoothen traffic flow between key consumption and manufacturing clusters between Delhi and Mumbai, vis-à-vis the golden quadrilateral (NH-48), which is running at high utilisation (a few of the toll plazas in Gujarat on NH-48 cater to high vehicular traffic).

“It will lead to better connectivity for exports and imports as well as domestic trade. A few of the manufacturing clusters across cities are auto components, biotech, chemicals, electronics, engineering goods (light and heavy) in NCR, drugs and pharmaceuticals, plastics, fabrication in Vadodara, textiles, power looms etc in Surat, and chemicals, stones in Alwar and Dausa,” he explained.

Reducing logistics costs

Infrastructure major REPL’s AVP (Planning) Prabhakar Kumar pointed out that the government has already been putting in efforts to reduce logistics costs to improve productivity, reach and economic prosperity.

“India’s logistics costs are 16-18 per cent (of GDP), compared to 8-10 per cent in China, 12 per cent in Europe and 15 per cent in the US. With reduced time travel, cut in fuel expenditure and improved connectivity, DME will reduce logistics costs considerably. However, India would need more such grand infrastructure plans to match its aim of lowering logistics costs to 9 per cent,” he added.

The DME is expected to reduce the travel time and distance between hubs such as Delhi, Alwar, Ferozepur Jhirka, Rajgarh and Bandikui, resulting in cost savings and travel time reduction, which will improve supply chain planning and inventory optimisation. Moreover, better speeds will improve truck utilisation aiding in reducing logistics cost, he added.

Tourism potential

Besides, improved connectivity to major tourist attractions (such as Jaipur, Sariska Tiger Reserve, Keoladeo and Ranthambore National Parks) as well as a better travel experience (such as wayside amenities) will have a positive impact on tourism, Purkayastha noted.

The Delhi-Dausa-Lalsot stretch passes through the vicinity of culturally-rich places such aslike Jaipur, Mathura, Vrindavan and Agra, among others | Photo Credit: KAMAL NARANG

Further, the Delhi-Dausa-Lalsot stretch passes through the vicinity of culturally-rich places such as Jaipur, Mathura, Vrindavan and Agra, among others. Collectively, this has the potential for boosting both tourism and trade, he added.