The eagerly anticipated policy framework was unveiled on September 17 by prime minister Modi. While addressing the needs of all the major players in the enormous yet disjointed logistics sector of the country, the National logistics policy.
The new framework strongly emphasizes streamlining procedures for seamless collaboration and lowering overall logistical costs, in addition to encouraging job creation and workforce skill development.
The policy has been brought in tandem with the Prime Minister’s ambitious GatiShakti national master plan. Which was launched the previous year to build robust infrastructure, fill the missing gaps in logistics, and draw more investments into the country.
The size of the Indian logistics market was about $250 billion in FY21 and it is estimated that this sector will grow to $380 billion by 2025, at a compound annual growth rate of 10-12 per cent.
This holds great relevance for India’s economic growth. According to industry data, India has a higher logistics cost as a percentage of GDP at 13-14 per cent compared with the BRICS (Brazil, Russia, India, China & South Africa) average of 11 per cent. Along with the higher costs of movement of logistics in India. It’s not easy and seamless, as per data for the movement of goods it’s a cumbersome process as it requires lots of checking and paperwork with different departments all functioning in silos which many times leads to the missing of products. As per the government and experts’ opinion on the National Logistics Policy (NLP), it is the right step in the direction of removing those inefficiencies.
The importance of logistics movement came to the fore at the time of the pandemic especially when essential commodities had to be delivered across the length and breadth of the country during the COVID period. These included fast-moving consumer goods and pharmaceutical sector products such as oxygen cylinders, vaccinations, and medical aid. So it is being seen as a much-needed one.
During the launch of the policy at Vigyan Bhawan, Prime Minister said the National Logistics Policy will bring new energy to all sectors. He said that policy is a beginning and that ‘policy plus performance is equal to progress. When parameters, roadmap, and the timeline for performance come together then policy plus performance equals progress. He also established coherence between the speed with cheetah moves in the same way we want our logistics to be moved across places with the same speed and efficiency.
He also said, the new NLP is not something that has come on the table overnight and has been drafted on paper, there are 8 years of hard work behind it. An umbrella policy for the logistics sector has been in the works for around three-four years. It was felt that the logistics cost in India is high compared to other developed economies. India’s logistics cost as a proportion of the Gross Domestic Product (GDP) is believed to be around 13-14 per cent. The government now aims to bring it down to single digits as soon as possible.
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. PM Modi pointed out that the total capacity of Indian ports has increased significantly and the average turn-around time of container vessels has come down from 44 hours to 26 hours.
The Prime Minister also launched the Unified Logistics Interface Platform-ULIP which will bring all the digital services related to the transportation sector into a single portal. It will be some kind of cab booking system where a customer will find the best route and on-time containers which will eventually free the exporters from a host of very long and cumbersome processes. A new digital platform–Ease of logistics Services or E-Logs–has also been launched, through which industry associations can take up any issues about operations and performance with the government. “A complete system has also been put in place for the speedy resolution of such cases”, he said.
Along with ULIP and E-Logs, the other two schemes had been implemented through the Comprehensive Logistics Action Plan (CLAP) under NLP, includes:
- Integration of Digital System (IDS)
- System Improvement Group (SIG)
As the logistics sector in India is highly fragmented with most of the marginal players having no access to technology and digitalization, hence “Unified Logistics Interface Program” (ULIP) becomes a very important cog in the wheel. For a large part of the logistics industry, ULIP will help in reducing time and costs, in well-organized inventory management, as per the industry experts.
Some states such as Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Rajasthan, Telangana, and Uttar Pradesh have already formed their logistics policy along with Logistics policies of 13 states are still in the draft stage.
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