National Logistics Policy

The government plans to improve efficiency across various sectors and address issues of the high cost of logistics as compared to other developed economies. The policy is expected to focus on areas such as process re-engineering, digitisation, and multi-modal transport.

The National Logistics Policy stands as one of the key initiatives in improving the effectiveness of India's logistics ecosystem. After seeing success in implementing GST to remove the interstate barrier in moving cargo, this policy should help integrate local supply chains with international supply chains better. 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.

The government has been working on the policy for close to three years. It was delayed due to the Covid-19 pandemic. The policy is expected to bring down the logistics cost, which is as high as 12-13% of the GDP to around 8% of GDP in the next five years.

Reduced logistics cost and increased logistic efficiencies will energise the economy across sectors in multiple ways and take us many steps closer to emerging as a global manufacturing powerhouse.

Through this policy, the government also looks to provide a roadmap to reduce the country’s dependence on road transport for cargo movement and explore more options such as rail, shipping, road, and air transport.

Digital transformation of this sector will also bring in global standards in warehousing infrastructure and operations by facilitating technology integration. Digitalisation of operations across the logistics sector will certainly make the dream come true by reducing the bottom–line expenses by expediting the last–mile delivery, helping businesses save time and money.

Over the past five fiscal years, the government has invested close to Rs 15 lakh crore in augmenting hard infrastructure such as roads, rail, ports and airports. Moreover, in the long run, this initiative will create a single-window e-logistics market and focus on the generation of employment, skill development, and competitiveness among medium and small enterprises.

Its right implementation and widespread adoption will help structurally reduce logistics costs and make a material difference to the growth of India’s manufacturing and services sectors.

Going forward, India’s logistics sector will be more cost competitive, environment friendly, formalised, transparent, with reduced and predictable delivery timelines.

The reduced logistics cost and increased efficiencies will energise the economy across sectors in multiple ways and take us many steps closer to emerging as a global manufacturing powerhouse.

S Mohini Ratna, Editor, VARINDIA