Third Anniversary of the National Logistics Policy (NLP)

Syllabus: GS3/Economy

Context

• The Department for Promotion of Industry and Internal Trade (DPIIT) commemorates the third anniversary of the National Logistics Policy (NLP), launched in 2022.

About

• Its key objectives are:
  • to reduce logistics costs to global benchmarks and to bring it below 10% of GDP,
  • improve India’s ranking in the Logistics Performance Index (LPI) to the top 25 by 2030,
  • to establish a robust, data-driven decision support system to ensure an efficient and integrated logistics ecosystem.

Key Achievements of India’s Logistics Sector

• The Unified Logistics Interface Platform (ULIP) has facilitated secure Application Programming Interface (API) integration across more than 30 digital systems. 
• Ranking in 2023 Logistics Performance Index (LPI): India was ranked 38th place out of 139 nations, a notable improvement of six places since the last ranking in 2018. 
• The Inland Waterways Authority of India (IWAI) recorded cargo movement of 145.5 million tonnes in the year 2024–25.
  • The number of operational national waterways has also increased from 24 to 29 during the same period.

Overview of the Logistics Landscape in India

• India’s logistics sector was valued at USD 215 billion in 2021. It is well-positioned for strong growth with an expected compound annual growth rate (CAGR) of 10.7% till 2026. 
• In 2017, a separate logistics unit was created under the Department of Commerce to oversee the Integrated Development of Logistics Sector. 
• The Logistics Industry supports manufacturing, retail, e-commerce, and services by managing inventory, transportation, storage, warehousing, and distribution, linking producers to consumers, both domestically and internationally.

Key Advantages of Efficient Logistics Infrastructure

• Supply chain efficiency: Logistics ensures a smooth and efficient supply chain, minimising delays and reducing lead times. 
• Connectivity and Accessibility: Logistics networks enhance connectivity and accessibility, linking various regions and markets. 
• Cost reduction and competitiveness: Efficient logistics operations contribute to cost reduction in transportation, storage, and distribution. 
• Job creation: The logistics sector is a significant source of employment, providing jobs in transportation, warehousing, distribution, and related services. The sector is projected to add 1 crore jobs by 2027.
• Economic integration: A well-developed logistics sector facilitates economic integration by connecting various economic zones and promoting a seamless flow of goods and services. 

Challenges

• High Logistics Cost: India’s logistics cost is very high at around 13–14% of GDP, making Indian exports less competitive compared to global peers.
• Infrastructure Gaps: The sector suffers from infrastructure gaps in warehousing, cold storage, and last-mile connectivity.
• Overdependence on Road: There is an overdependence on road transport, which causes congestion, delays, and higher transportation costs.
• Multimodal Transport Issues: The low share of railways and inland waterways in freight transport hampers the development of an efficient multimodal system.
• Environmental Concerns: Heavy dependence on diesel-based trucking increases carbon emissions and contributes to environmental pollution.

Key Government Initiatives in Logistics

• PM GatiShakti Master Plan: It was launched in 2021 to integrate different modes of transport into a coordinated network.
  • It has brought together 57 Central Ministries/Departments and all 36 states and union territories. 
• Maritime Amrit Kaal Vision 2047: It is aligned with blue economy principles, lays out a long-term roadmap to transform India’s maritime sector.
  • The vision also aims to boost coastal tourism, strengthen maritime skill development, and position India as a global hub for shipbuilding and repair.
• Dedicated Freight Corridors: The Ministry of Railways is currently developing two Dedicated Freight Corridors (DFCs).
  • The objectives of these specialized railway lines are to ease congestion on existing passenger routes, lower transportation costs, and improve energy efficiency.

• Multi-Modal Logistics Park: 35 key locations such as Chennai, Bengaluru, Nagpur, Indore, and others have been approved through both private and public sector efforts for the development of MMLPs. Out of these, 5 are expected to be operational by 2027.
• Unified Logistics Interface Platform (ULIP): It is a digital platform that brings together data from various logistics-related ministries and departments on a single interface; it has recorded 100 crore API transactions in 2025.
• Gati Shakti Vishwavidyalaya (GSV): The GSV is India’s first university dedicated to transport and logistics education.
  • GSV plays a key role in preparing skilled professionals to support this national goal. 
  • Gati Shakti Vishwavidyalaya has signed Memoranda of Understanding (MoUs) with about 40 different industrial and academic institutions.
• Sustainability:The Freight Greenhouse Gas (GHG) Calculator has been developed for calculating and comparing the total cost of transportation and GHG emissions to build awareness and support sustainable development.
  • The Indian Railways has launched Rail Green Points for freight customers, allowing them to see potential carbon emission savings. 

Source: PIB