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Indian National Logistics Policy aims to bring down logistics cost from 13-14% to single digits – PM Narendra Modi

We want our logistics to move at the same speed as the cheetah” – this is the word of Indian Prime Minister Narendra Modi as he launched India’s National Logistics Policy on the 17th of September 2022.

The National Logistics Policy which has been 8 years in the making is aimed at ensuring quick last-mile delivery, ending transport-related challenges, saving time and money for manufacturers, and preventing wastage of agro-products.

India which recently upended the UK as the 5th largest economy in the world has been setting big export targets on the back of its Make In India program aimed at reiterating India’s position as a major manufacturing hub.

India is setting big export targets and is also fulfilling them. The notion that India is emerging as a manufacturing hub, is stabilizing in the mind of the world,” said the Prime Minister.

Highlighting the fact that policy is just a beginning and policy plus performance is equal to progress, Prime Minister Modi said “Today’s India prepares the ground before bringing any policy, only then a policy can be implemented successfully. National Logistics Policy has not come out of the blue and there are 8 years of hard work behind it.

The Prime Minister reiterated that schemes like Sagarmala, and Bharatmala, expedited the work of Dedicated Freight Corridors to improve logistics connectivity for systematic infrastructure development.

Indian ports have seen a significant improvement in the turnaround time of container vessels which is down currently to 26 hours compared to 44 hours, the Prime Minister commented.

PM Modi termed the National Logistics Policy as a guiding and driving force and congratulated all involved in the drafting of the policy and said “The policy is a collaboration of views, ideas, and strategic planning for the last eight years.

The Department of Commerce under the Ministry of Commerce and Industry has highlighted that the National Logistics Policy will have the below benefits

As part of the National Logistics Policy, the relevant departments will use paperless EXIM trade process, faceless assessments in Customs, provision of e-way bills, and FASTag to increase the efficiency of the logistics sector.

A new digital platform Ease of logistics Services, E-Logs has also been launched to assist the industry to communicate on matters affecting logistics operations directly with the relevant government agencies.

An e-book on the launch of the National Logistics Policy by the Dept. for Promotion of Industry and Internal Trade mentions the targets of the NLP as

  1. Reduce the cost of logistics in India to be comparable to global benchmarks by 2030
  2. Logistics Performance Index ranking – endeavor to be among the top 25 countries by 2030, and
  3. Create a data-driven decision support mechanism for an efficient logistics ecosystem.

The NLP will reportedly be implemented through a Comprehensive Logistics Action Plan (CLAP) which has 8 action areas :

  1. Integrated Digital Logistics Systems: Develop a system of unified logistics interface to link multiple data sources and develop cross-sectoral use cases for logistics stakeholders.
  2. Standardization of physical assets & benchmarking of service quality standards: Enhance interoperability, minimize handling risks, undertake process optimization, and improve ease of doing business, through standardization of physical assets and benchmarking of service quality standards in logistics
  3. Logistics Human Resources Development and Capacity Building: Develop an overarching logistics human resource strategy and under its guiding principles, line ministries to develop action plans to address skill development-related and internal capacity-building challenges in the respective sector.
  4. State Engagement: Provide support for the development of state/city level logistics plans, set up an institutional framework to take action at the city/state level, measure and monitor action by states and rank them.
  5. EXIM (Export-Import) Logistics: Addressing infrastructure and procedural gaps in India’s EXIM connectivity and creating an efficient and reliable logistics network, with transparent and streamlined cross-border trade facilitation, for improved trade competitiveness and greater integration of India with regional and global value chains.
  6. Service Improvement framework: Improving regulatory interface to enable seamlessness between sectors, promote standardization, formalization, and inter-operability; eliminate fragmentation in documentation, formats, processes, and liability regimes; reduce gaps in regulatory architecture.
  7. Sectoral Plan for Efficient Logistics: Sectoral Plans for Efficient Logistics (SPEL) aligned with PM GatiShakti, will be developed for each sector with underlying philosophies of inter-operability, resiliency, sustainability, and innovation. Specifically, SPEL would (i) address logistics issues pertaining to infrastructure, processes, digital improvements, policies, regulatory reforms, and capacity building for a better workforce, and ii) prioritize cross-sectoral cooperation to complement and not duplicate efforts and focus on optimization of the modal mix.
  8. Facilitation of Development of Logistics Parks: Logistics parks (eg. Multi Modal Logistics Parks, Air Freight Stations, Inland Container Depots, Container Freight Stations, cargo terminals, etc.) are hubs for intermediary activities (storage, handling, value addition, inter-modal transfers, etc.) in the supply chain connected by a transportation network. It is envisaged to take the following steps to facilitate the development of logistics parks:
    • Draft framework guidelines to facilitate the development of Logistics Parks in the country with a focus on encouraging private investment.
    • Create a network of logistics parks by mapping them on the PM GatiShakti NMP, for enhanced visibility, improved logistics efficiency, optimum utilization, and connectivity.

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