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Sansad TV: Special Report- National Logistics Policy





The National Logistics policy aims to reduce the cost of logistics from 14-18 percent of GDP to global best practices of 8 percent by 2030. Countries like the US, South Korea, Singapore, and certain European nations have such a low logistics cost-to-GDP ratio. The policy’s target is to ensure that logistical issues are minimised, exports grow manifold, and small industries and the people working in them benefit significantly.

Need and demand for it:

  • The need for a national logistics policy was felt since the logistics cost in India is high as compared to other developed economies.
  • It is imperative to reduce the logistics cost in India for improving the competitiveness of Indian goods both in domestic as well as export markets.
  • Reduced logistics cost improves efficiency cutting across various sectors of the economy, encouraging value addition and enterprise.
  • Since 2014, the government has put significant emphasis on improving both, Ease of Doing Business and Ease of Living.
  • National Logistics Policy, a comprehensive effort to address issues of high cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem, is yet another step in this direction.
  • The policy is an endeavour to improve the competitiveness of Indian goods, enhance economic growth and increase employment opportunities.
  • It has been the vision of the Prime Minister to develop world-class modern infrastructure through the integration of all stakeholders in holistic planning and implementation so that efficiency and synergy are achieved in the execution of the project.
  • The PM GatiShakti – National Master Planfor muti-modal connectivity – launched by the Prime Minister last year, was a pioneering step in this direction.
  • PM GatiShakti will get further boost and complementarity with the launch of the National Logistics Policy.

The Policy and its analysis:

  • It lays down an overarching interdisciplinary, cross-sectoral, multi-jurisdictional and comprehensive policy frameworkfor the logistics sector.
  • The policy complements the PM GatiShakti National Master Plan.
  • While PM GatiShakti National Master Plan is aimed at integrated infrastructure development, the National Logistics Policy is envisaged to bring efficiency in logistics services, and human resources through streamlining processes, regulatory framework, skill development, mainstreaming logistics in higher education and adoption of suitable technologies.
  • The vision is to develop a technologically enabled, integrated, cost-efficient, resilient, sustainable and trusted logistics ecosystem for accelerated and inclusive growth.
  • The Policy sets targets and includes a detailed action plan to achieve them. The targets are:
    • to reduce cost of logistics in India to be comparable to global benchmarks by 2030
    • improve the Logistics Performance Index ranking, to be among top 25 countries by 2030, and
    • create data driven decision support mechanism for an efficient logistics ecosystem.
  • To monitor the implementation of the Policy and integrate efforts across stakeholders, the Policy will utilize the existing institutional framework i.e., Empowered Group of Secretaries (EGoS) created under the PM GatiShakti NMP.
  • This policy paves way for reduction in logistics cost in the country.
  • Focus will be on enabling adequate development of warehouses with optimal spatial planning, promotion of standards, digitization and automation across the logistics value chain and better track and trace mechanisms.
  • Further measures to facilitate seamless coordinationbetween different stakeholders and speedy issue resolution, streamlined EXIM processes, human resource development to create an employable pool of skilled manpower, are also laid out in the policy.
  • Also, all States and UTs have been fully onboarded. Fourteen States have already developed their respective State Logistics Policies on the lines of the National Logistics Policy and for 13 States, it is in draft stage.
  • This policy supports enhancing competitiveness of Micro, Small and Medium Enterprises, and other sectors such as agriculture and allied sectors, fast moving consumer goods and electronics.
  • With greater predictability, transparency and reliability, wastages in supply chain and need for huge inventory will reduce.
  • Greater integration of global value chains and higher share in global trade besides facilitating accelerated economic growth in the country, is another outcome envisaged.
  • This is expected to reduce logistics cost to achieve global benchmarks and improve country’s Logistics Performance Index ranking and its global positioning.
  • This policy lays down a clear direction for transforming India’s logistics sector, improving logistics efficiency, reducing logistics cost and improving global performance.