The logistics sector single-handedly contributes around 14.4% in the Indian economy, which is a significant proportion and is further anticipated to boom at a Compound Annual Growth Rate (CAGR) of 15-20 per cent. Owing to the value this sector brings to our economy Prime Minister Narendra Modi, recently launched India’s National Logistics Policy (NLP) recently. The goal of the policy is to bring logistics costs down from the current level and into line with those of other developed nations. More 22 million Indians depend on logistics for their livelihood; improving or further developing this sector will be an encouragement for more people to get involved in this industry.
The NLP is a brainchild of the Commerce and Industry ministry, since the costs of logistics in India is high, they have come up with this policy as a solution to help improve the current situation and bring down the costs from 13-14% of the GDP spent on logistics costs which is the current rate, down to 10% and enhance the competitiveness of the industry. Developed nations such as Europe, USA and Singapore have a rate of 6-8%, which helps boot exports. The object of this policy is to make the logistics industry more efficient and lower its costs and help India to be on-par with the developed nations.
Logistics sector in India must develop radically to play a larger role in the economic development of the country. India is the one of the leading economies in the world, and the second most populated country.
Major Features of the plan will include the following:
1) Digital Integration System – seamless and quicker work flow
2) Unified Logistics Interface Platform – single portal digital services
3) Ease of Logistics Services – operational issues to be simplified
4) EXIM (Export-Import) Logistics – heighten regional and global logistics chains
5) State Engagement – involve the state governments to support city and state level logistics strategies
6) Comprehensive Logistics Action Plan – help with standardization of service
7) Facilitation of Development of logistics parks – supply chain operation development and multi-modal logistics parks for air freight, sea freight and inland depots
The aim of #nlp is to contribute to India performing better in international rankings and paving the road for India to develop become a logistics hub, and this enterprise seems to be taking the right step towards that direction to help us further as a country to have a strong foothold in the global market.
As a Logistics service provider (LSP) we support this initiative as it brings transparency and completely digitalisation, one of the most important sectors of our economy by brining in various key stake holders under one roof. This is profound benefits for various players along the supply chain process.
Also, if we have the capacity to reduce our logistics cost via this initiative more FDI’s may be interested to invest in our country and hopefully capitalise of the ‘Make in India’ initiative in order to project India as a global manufacturing hub.