The National Logistics Policy will drive India’s next economic growth curve | Daily News Byte

The logistics industry is considered the backbone of the Indian economy, with estimates that indicate it is valued at $215 billion and growing by a CAGR of 10.5%. Moreover, the sector directly and indirectly employs around 22 million people. However, the industry has several challenges, including tax structure and storage issues, high order intensity ratio and other high supply chain costs.

India’s logistics sector is highly fragmented and complex with more than 20 government agencies, 40 PGAs, 37 export promotion councils, 500 necessary certificates and 10,000 commodities for export. In addition, the sector also includes 50 IT ecosystems, banks, insurance companies, 129 ICDs, 168 CFSs, 200 shipping agencies, 36 logistics services and 50 IT ecosystems. In addition, 81 authorities and 500 certificates are required for export and import. To address this issue, the government enacted the National Logistics Policy.

The National Logistics Policy aims to improve India’s trade competitiveness, create more jobs and improve ease of doing business, which would lay the foundation for India to become a logistics hub. The implementation of the policy would bring about a paradigm shift in the logistics industry by streamlining processes with technology and digitization. This policy is an example of inter-ministerial cooperation and will help in supply chain integration.

This new policy has four distinctive features: Digital System Integration (IDS); Unified Logistics Interface Platform (ULIP); Ease of logistics (ELOG); and the Systems Improvement Group (SIG). Under ULIP, the government plans to integrate seven ministries on a single platform to provide logistics companies with information on cargo movement in the country. The platform has its own peculiarity with a distinctive approach, which is globally unique. Through this integration of ministries, data is collectively entered, which emphasizes the importance of data in the logistics industry. Similarly, a new digital platform Ease of Logistics Services (E-Logs) has been launched to help industry stakeholders resolve issues by approaching the government.

The policy will be further enhanced when used in conjunction with earlier connectivity and infrastructure development initiatives such as the Gati Shakti programme, the Sagarmala policy and the Bharatmala policy, the inclusion of these policies would contribute to establishing a single window e-marketplace as a one-stop shop for important knowledge and information exchange, thus easing the problems of facilitating logistics in the country.

As India strives to become a $5 trillion economy by 2024-25, a more agile logistics framework that focuses on the unorganized sector and overall trade network could help the country achieve this vision. Here, NLP would give the sector the necessary impetus. NPL at the macro level will improve warehouse capacity and facilitate faster communication in bringing consumer goods closer to their demand. As the logistics sector gets stronger, the manufacturing sector, the automotive sector will also get a significant boost in their business with major delivery turnarounds. NLP would strengthen energy in all sectors and boost India’s global trade.

Given some increase in international trade, this policy would help create India ‘atmanirbhar’ or self-reliance, driving foreign investment and providing new perspectives to the country’s newcomers. Moreover, this policy would greatly benefit farmers, as it would allow them to market their goods faster, reduce waste and avoid unnecessary delays, all of which would reduce the overall cost..

Stakeholders further expect that the National Logistics Policy will bring a revolutionary approach to the national logistics environment, boosting the efficiency of supply chains. Logistics software companies predict that the newly developed policy will enable a modal shift in logistics away from the current over-reliance on roads (over 60% share vs. 25% internationally) and towards trains (30% share vs. roughly 60% globally) and waterways. which now have a 5% share of the modal mix.

To summarize, NLP is a significant step in the right direction, the sector already records an increased inflow of domestic and foreign funds. This policy would also encourage innovation and attract more investment, while making the industry more competitive.

This policy has the potential to improve India’s competitiveness globally. It is possible that India could eventually be among the top 25 countries on the World Bank’s Logistics Performance Index (LPI).

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