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Prime Minister Narendra Modi on Saturday launched the National Logistics Policy (NLP) at the Vigyan Bhawan in New Delhi.
The policy is aimed at promoting seamless movement of goods and enhancing the competitiveness of the industry. The policy is expected to focus on areas such as process re-engineering, digitisation, and multi-modal transport. To improve connectivity, the government has been doing systemic infrastructure development through schemes such as Sagarmala, Bharatmala, Dedicated Freight Corridor.
that the adoption of technology has been strengthening the logistic sector. For instance, e-sanchit has been enabling paperless export-import trade processes, and faceless assessment in customs has been rolled out. Similarly, e-way bill and FASTag are also common in highways to improve the efficiency of the logistics sector.
The policy has been brought in tandem with the Prime Minister's ambitious GatiShakti national master plan that was launched to build robust infrastructure, fill the missing gaps in logistics and draw more investments into the country.
The move assumes significance as high logistics cost impacts the competitiveness of domestic goods in the international market.
The need for a national logistics policy was felt since the logistics cost in India is high as compared to other developed economies. It is imperative to reduce the logistics cost in India for improving the competitiveness of Indian goods both in domestic as well as export markets,
Reduced logistics cost improves efficiency cutting across various sectors of the economy, encouraging value addition and enterprise.
WHAT IS NLP?
First introduced in 2020 during Finance Minister Nirmala Sitharaman’s Budget speech, the policy, according to the government, will bring in an integrated and tech-enabled approach to logistics operations to bridge the efficiency gap. On September 13, Commerce and Industry Minister Piyush Goyal said the government has stressed the need to reduce logistics costs in the country from the current levels of 13-14 per cent of GDP.
A comprehensive action plan is proposed under the policy, with major features including integrated digital logistics systems; unified logistics interface platform; ease of logistics; and standardisation of physical assets and benchmarking service quality standards, state engagement, human resource development and capacity building, export-import logistics, sectoral plans for efficient logistics, and facilitation of the development of logistics parks.
WHY THE NEED FOR A POLICY?
The logistics cost in India is high as against 9-10 per cent in the US and Europe and 11 per cent in Japan. There is no single department which manages the sector as it is currently being managed by many ministries, including road transport, shipping, railways, civil aviation, posts and commerce and industry, and finance.
According to the Commerce Ministry, the sector is complex with more than 20 government agencies, 40 PGAs (Partner Government Agencies), 37 export promotion councils, 500 certifications, over 10,000 commodities, and USD 160 billion market size. It also involves 200 shipping agencies, 36 logistics services, 129 ICDs (Inland Container Depots), 168 CFSs (Container Freight Stations), 50 IT ecosystems, banks and insurance agencies.
The sector provides livelihood to more than 22 million people and improving it will facilitate 10 per cent decrease in indirect logistics cost leading to the growth of 5 to 8 per cent in exports, the ministry had stated. As per estimates, the worth of Indian logistics market is over $200 billion.
1. Integration of Digital System (IDS): This system will look forward to integrating 30 different systems of seven different departments, which are road transport, railway, customs, aviation, foreign trade, and commerce ministries. The digital data from these departments will be integrated under IDS. This will directly affect shorter cargo movement in a positive way.
2. Unified Logistics Interface Platform (ULIP): This system will monitor smooth cargo movement.
3. EASE OF LOGISTICS (ELOG):
Under this, the new policy will simplify the rules, which is expected to simplify basic business.
4. SYSTEM IMPROVEMENT GROUP (SIG):
This system will be used to monitor all logistics-related projects regularly and will facilitate the removal of any hurdle.