India’s logistics sector is undergoing massive transformation, and now this exponentially growing sector is going to a get a big boost on September 17, when the National Logistics Policy will be unveiled by Prime Minister Narendra Modi. The objective of the policy is to facilitate a seamless flow of goods across India. The policy found mention for the first time in the Union Budget 2020.
“The Policy will provide a major boost to the sector, with an aim of strengthening and streamlining India’s Logistics sector. The expected focus areas in the policy include process re-engineering, digitization, multi-modal transport, etc. The move is significant because high logistics cost brings down the competitiveness of domestic goods in the international market. The difference between the logistic cost to GDP, in India at 14 per cent and in the developed world at 8 per cent, is very significant,” said Mahendra Shah, Chairman and Managing Director, V-Trans (India) Ltd. The government has repeatedly emphasised on the need to bring down logistics cost in the country from the current levels of 13-14 per cent of GDP. While the developed economies have a logistics cost of around 7-8 per cent. The Indian government is making efforts to bring down the logistics cost in the nation at par with developed economies. The worth of Indian logistics market is estimated at over $200 billion. The sector provides livelihood to more than 22 million people.
“With this implementation of National Logistics Policy, there will be further boost to the development in an integrated logistics ecosystem, reduction in time, wastage & cost, and ensuring sustainability. It will further strengthen the warehousing sector by improving the quality of storage infrastructure, including specialized warehouses, and increasing warehousing capacity by identifying areas of standardization and optimization. The national logistics policy will ensure great synergy between various Central government departments, agencies, and private players. In coordinate on with the states, it will also ensure the issues that inflate logistics costs are swiftly resolved,” Shah of V-Trans (India) said.
Many efforts in this regard have been taken in the past. The government, for instance, rolled out PM Gati Shakti Master plan in October 2021, which was dubbed as a transformative approach for economic growth and sustainable development. It consists of 7 'engines': namely, railways, roads, ports, waterways, airports, mass transport, and logistics infrastructure.
The government is also putting focus on multimodal connectivity which will provide integrated and seamless connectivity for movement of people, goods and services from one mode of transport to another. In that bid, the government recently approved the development of 35 New Multi-Modal logistics Parks under Bharat Mala Pariyojana to reduce logistics cost.