National Logistics Policy is one of the most ambitious projects of the Indian Government. The project aims to enhance the logistics sector competitiveness, improve India's ranking in the Logistics Performance Index, reduce logistics transportation costs and promote job creation.
The logistics sector is the backbone of India's economy. The sector makes up 14.44% of the country's GDP and directly impacts all industries. It also provides employment opportunities to more than 22 million people.
Proper implementation of the National Logistics Policy will improve India's rank in the Logistic Performance Index (currently 44) whereas China and USA rank 26th and 14th respectively. The cost of Logistics in India is about 13-14% of the GDP. The cost is higher than in developed countries Germany and The USA where it is 8% & 9.5% respectively. High logistic cost makes India an unattractive destination for logistics.
Prime Minister of India, Narendra Modi introduced the National Logistic Policy on 17th September 2022. This policy helps to overcome key challenges in the logistics sector.
The objective of the logistic policy is the optimization, modernization, and democratization of the logistics sector. The policy also aims to develop a data-driven approach for the sector.
NLP will empower the logistics sector of India. The policy will unify logistics services and reduce the cost & time taken in transporting goods. It will also unify service providers and reduce the cost of logistics outsourcing. It will also reduce our dependence on roadways for logistic transportation and seamlessly integrate all modes of transport.
The Indian logistics sector is fragmented and unorganized. It has a complex regulatory system and low adoption of technology. Complex regulatory systems and low adoption of technology delays increase the time taken to transport goods. Poor last-mile connectivity and unpredictable supply chains make matters worse.
NLP will improve India's ranking in the Logistic Performance Index and try to bring India into the top 25 countries on LPI before 2030.
The policy vision is as follows-
Improve Logistic Efficiency
The Indian Government wants to reduce logistic costs and time and improve the performance and efficiency of the logistics sector.
The Government will develop multi-nodal transport infrastructure. The Multi-Nodal Transport Infrastructure will ensure that every mode of transport is interconnected and utilized efficiently.
Digital Infrastructure will ensure predictability, visibility, tracking, and tracing of cargo movements. The digital infrastructure will also leverage warehousing capabilities.
Sectoral Modernization will support modern trade and e-commerce, create a resilient supply chain, and effective emergency response.
Creation of Job Opportunities
Logistics services will create employment opportunities and improve the quality of life of different sections of society( especially farmers and Micro, Small, and Medium enterprises).
The National Logistics Policy will have a deep impact on India's GDP.
The policy will accelerate the development of road and air infrastructure.
The Government will develop 2500 km of access-controlled highways, 9000 km of economic corridors, and 2000 km of coastal and land port roads.
100 new airports going to be established under the UDAN scheme.
1200 aeroplanes shall be added from the present 600.
Delhi – Mumbai & Chennai – Bengaluru express highways to be made operational by 2023.
National Logistic Policy requires a comprehensive framework to function efficiently. The policy requires great physical and communicational interconnectivity between various Government Departments, economic zones, and storage houses.
To ensure interconnectivity, the Government is developing a Unified Logistics Interface Platform( ULIP).
The ULIP is an integrated platform. The platform will utilize Technology to enhance efficiency, and reduce logistics costs for stakeholders. The platform will integrate 7 ministries into one platform. It will help to provide logistics companies with information about cargo movement in the country.
The platform will unite service providers, shippers, and consignees with government agencies and create a single window to ensure transparency and efficiency in the Logistic industry.
ULIP is an open-source platform that will function on a request & response-based system. The platform will have a three-tier structure.
The application Layer will connect the data source and the user.
The Governance Layer will help the policymakers to ensure compliance and make policy decisions.
The presentation layer will consist of private players. They will act as an interface with the end customer.
Support inter-ministry/inter-agency connections and collaborations.
Optimal utilization of various modes of transportation
Real-time process and cargo movement monitoring
Reduction in operations and maintenance costs
Simplification of the documentation process
Identification of cheaper logistics modes
Just-in-time Inventory Management
The National Logistic Policy will be a game changer in India's economy. After the Prime Minister launched the National Logistic Policy, stocks of many logistic companies rallied. Stocks of Container Corporation of India Ltd, Blue Dart Express, and VRL Logistics rose by 1 to 2%.
The Delhi-Mumbai and Chennai-Bengaluru express highways will be operational by 2023.
The Government will establish 100 more airports under the UDAN scheme. The number of airports will be increased from 600 to 1200.
According to The Print " The Logistics Sector is estimated to grow over 3 Trillion in 35 years". If India leverages, integrates, modernizes, and optimizes its Logistics sector it can utilize this opportunity.
Proper Implementation of the National Logistics Policy will ensure the reduction in the cost of logistics, improvement in the Logistic Performance Index, and creation of a Data-Driven Logistic sector.
If India can implement National Logistics Policy, the logistics sector is estimated to grow at a rate of 10 to 12/ annually. The Indian Logistic sector will be valued at $3 to 3.5 Trillion by 2047 when the country celebrates 100 years of Independence.
During the launch of the National Logistics Policy Prime Minister Shri Narendra Modi said " We want luggage to move as swiftly as a cheetah". If India can ensure last-mile connectivity, end transport-related challenges, prevent wastage of agro-products, and save time and money for manufacturers, the results will be impeccable for the country's economy.
The Print " Logistic sector is estimated to grow by over 3 Trillion in 35 years. India must leverage it.
Draft National Logistics Policy
E-Book on Launch of National Logistics Policy