The newly-acquired infrastructure status for the logistics sector will not just spur growth, but bring in more investments and create employment, industry body CII said on Thursday.

According to CII, the logistics sector in India is still very fragmented and has suffered from lack of investments and a proper recognition.

The industry group has been pursuing this issue with the government at various levels and ministries for the past few years. It has hailed the government's move of setting up a logistics division under the Ministry of Commerce for integration of related sectors.

R Dinesh, Chairman, CII Institute of Logistics, and Chairman for Sector Skill Council, said, "Now, with this recognition as infrastructure status to the logistics sector, it will not only help bring in more investments into this sector, but most importantly bring down the overall logistics cost by 1-2%."

According to the CII, the logistics sector, which already provides over 17 million jobs, will grow at an even faster rate going forward and provide even higher employment opportunities than before.

K V Mahidhar, Head, CII Institute of Logistics, said, "Our institute will continue to work with both users and service providers to capitalise on opportunities and the thrust by the government to further improve the competitiveness of the logistics sector. Subsequently, this will lead to the enhancement of the logistics performance index of the country."

There is an urgent need, the CII said, to facilitate credit flow into the sector with longer tenures and reasonable interest rates.

It added that infrastructure status for the logistics sector can result in an integrated planning of logistics infrastructure and better utilisation of existing assets and resources with a focus on timely maintenance and upgradation.