In New Delhi, in Vigyan Bhawan on 17th September 2022, Prime Minister Narendra Modi launched the National Logistics Policy (NLP) with a view to smoothening the systems for business and boost the liveability quotient. This policy intends to bring down the cost of logistics being currently 13-14% to the level that developed countries enjoy. Keeping costs low makes Indian produce more competitive both in the Indian domestic market as well as in the international market. Besides, low cost leads to high-efficiency efforts cutting across all sectors of the economy that encourages value addition and enterprise.
About the National Logistics Policy
- Promising to rejuvenate numerous sectors, the National Logistics Policy is, therefore, considered generically-with-before-the-policy scenario; only then is the actual implementation of the policy made possible.
- The NLTP at all stood for full duration of eight years. Policy alternate issues have been introduced to drastically reform last-mile delivery, uphold the spirit of prevention, and resolve the issues relating to transport; at the same time save manufacturing units from theft of time, saving time and cost for Mr. Every week Mostly coordination improvements are being planned to directly enhance the speed, value creation, and innovations of the sector.
- The National Logistics Policy is the first attempt to reduce costs and inefficiencies through an overarching interdisciplinary, cross-sectoral, multi-jurisdictional framework for the burgeoning logistics ecosystem.
- The goal of the policy is to provide greater efficiency and lower cost to the logistics sector. The policy will help economic growth, create employment, and improve Indian products’ competitiveness in the international market.
- Thus, the Prime Minister envisions the creation of modern infrastructure of world-class standard with a truly holistic planning and implementation process involving all concerned stakeholders.
- This is needed to make the implementation of the project more efficient and synergized. In this respect, the Prime Minister’s initiative PM GatiShakti also known as the National Master Plan for multi-modal connectivity, launched last year, was largely the first step.
- The establishment of National Logistics Policy shall offer immense support to the PM GatiShakti initiative and hence complement it.
- India’s logistics is the skeleton of its trade with the rest of the world, which facilitates diversification of not only the nation’s exports but also of products made in other countries.
- Hence, the NLP shall ensure seamless movement of goods that entails enhancing the competitiveness of Indian industries. At the same time, it aims at reducing logistics costs-above 16 percent of Gross Domestic Product (GDP) currently-to about 8 percent, which is the global average, by 2030.
- Further, by way of estimation, within two years, Indian logistics would hit the $ 215 Bn mark, while it stands at $ 160 Bn at present. Investment Information and Credit Rating Agency of India Limited (ICRA) estimates that the sector will develop at a Compound Annual Growth Rate (CAGR) of 10.5 per cent through 2025 after growing at a CAGR of 7.8 per cent over the past five years.
- This sector employs more than 22 million people in India, which through skill development is expected to grow at the rate of 5 per cent in 5 years.
Significance of the National Logistics Policy (NLP)
- The National Logistics Policy (NLP) issued by the Government of India in 2022, aims at improving the efficiency and competitiveness of the country’s logistics sector.
- It seeks to address issues like high logistics costs, supply chain inefficiencies, and infrastructure bottlenecks.
- One of the ambitions is to reduce logistics costs, which currently are about 13-14% of India’s GDP, against 8-10% in developed countries.
- It intends to do so by promoting multimodal transportation, integration of digital systems, and improved last-mile connectivity to bring down the logistics cost to single digits so that Indian goods may compete in global markets.
- Digitization is also promoted via mechanisms such as the Unified Logistics Interface Platform (ULIP), which is meant to allow seamless data exchange among various stakeholders and aid logistics operations with real-time information tracking, transparency, and efficiency.
- Another major focus of infrastructure Development is the linkage of NLP with the PM Gati Shakti initiative which imparts coordination among various modes of transport—railways, roads, airways, and waterways.
- For businesses, especially MSMEs and startups, the policy simplifies regulatory processes, reduces delays, and improves supply chain reliability. This boosts ease of doing business and enhances India’s position as a global manufacturing hub.
- In conclusion, the National Logistics Policy is a crucial step toward making India’s logistics sector more efficient, cost-effective, and globally competitive, contributing to overall economic growth and trade expansion.
Lacunae of the National Logistics Policy (NLP)
- Implementation Challenges – With such ambitious goals set by the policy, successful implementation has to take place at mostly state and local levels, among others. It remains complex to ensure coordination between multiple agencies.
- Infrastructure Bottlenecks – India’s logistics sector suffers from infrastructure inadequacies-lane quality is sub-par, ports are congested, and the rail network operates inefficiently. The NLP does not directly address these gaps in a time-bound manner.
- Regulatory Complexities – Logistics involve several stakeholders: central and state governments, private players, and regulatory bodies. Lack of uniform regulations and conflicting jurisdictions slows decision-making and project execution.
- Digital Integration and Adoption – While the NLP encourages digital transformation, smaller logistics players and MSMEs may find the cost of technology adoption prohibitive, thereby resulting in uneven benefits across the sector.
- Skill Gaps – There is a shortage of skilled human resources in the sector. The policy makes little reference to the development of the workforce and programs for skill enhancement for meeting the burgeoning demands of modern logistics.
- Environmental Concerns – Sustainable logistics practices, including green transportation and carbon footprint reduction, are not strongly emphasized in the policy.
The key Pointers relevant for UPSC CSE Prelims
The Indian government conceived the NLP 2022 to amplify the efficiency of the logistics sector and bring down costs.
Aims and Objectives
- Bringing down the cost of logistics from 13-14% of GDP to 8% of GDP (say, at par with developed countries).
- Grow economy via making Indian logistics globally competitive.
Key Features
- A Holistic Approach: Integrates different logistic services for enabling seamless multimodal transportation.
- Digitization & Technology Integration: Implementation of Unified Logistics Interface Platform (ULIP) and Ease-of-Logistics Service (E-Logs) for increase in co-ordination.
- Multimodal Connectivity: Infrastructure development in alignment with PM Gati Shakti National Master Plan.
- Regulatory & Institutional Framework: It shall formulate a Logistics Coordination Group (LCG) under the PMO.
- Skill Development and Capacity Building: Scope to enhance capacity in the logistics sector.
Four Key Pillars of the Logistics Policy
- Integration of Digital Systems (IDS) – Digital connectivity among logistics stakeholders.
- Unified Logistics Interface Platform (ULIP) – Real-time single-window access to logistics data.
- Ease of Logistics (E-Logs) – Online system for issue resolution.
- Ease of Logistics (E-Logs) – Online system for issue resolution.
- System Improvement Group (SIG) – Monitoring & policy implementation body.
Expected Benefits
- Lesser logistic cost, thereby increasing exports & competitiveness.
- Faster movement of goods under Make in India & Atmanirbhar Bharat.
- Further jobs can be created in transportation, warehousing, and supply chain management.
- Reduced carbon footprint through optimized logistics.
Related Government Initiatives
- PM Gati Shakti National Master Plan
- Bharatmala & Sagarmala Projects
- National Rail Plan 2030
- PLI Scheme for Manufacturing
Way Forward
The National Logistics Policy is intent on realizing efficiency, cost reduction, and enhancing the competitiveness of Indian products in the world market. Infrastructural enhancements through technology-driven supply chains and multimodal transport integration, smoothening the logistics regulatory regime, and skilled manpower development would be the way forward. Digital initiatives such as ULIP and AI will further enable logistics to become more productive and sustainable.
Conclusion
The National Logistics Policy intends to make operations and services more efficient, redefining cost structures and positioning India competitively on a global stage with its integrated digital systems, infrastructure development, and rationalized regulatory environment. Multi-modal transport, skill development, and sustainability are at the center of this policy, thereby building macro-economy and ease of doing business while bringing down the logistics cost to global standards.
