National Logistics Policy 2022

21/09/2022

506 2 minutes read

Context- The Prime Minister of India has recently launched the National Logistics Policy (NLP) at Vigyan Bhawan, New Delhi.

The National Logistics Policy was also announced in the Budget for 2022-23.
It focuses on certain significant areas such as process re-engineering, digitisation, and multi-modal transport.
The step was necessary as high logistics cost impacts the competitiveness of domestic goods in the international market.

The need for a national logistics policy was important since the logistics cost in India is high as compared to other developed economies.
The logistics cost in India is about 13-14 % where as in other developed economies, it is 8%.
India’s logistics sector is vastly defragmented and established under a complex structure.
It provides employment to about more than 22 million people and is expected to grow at the rate of 10.5% over the next 5 years.
Logistics is also the backbone of India’s international trade and will help in the diversification of India’s export basket.

The policy aims at reducing costs for the logistics sector to 10 percent in five years.
It helps to develop skills among youth and create employment opportunities.
It promotes the seamless movement of goods and enhances the competitiveness of the industry across the nation.
The policy focuses on some key areas like process re-engineering, digitization and multi-modal transport.

The policy aims at deducting the cost of the logistics by half to be near global benchmarks by 2030 by reducing the cost of logistics from 14-18% of GDP to global best practices of 8%. The current GDP cost is 16%.
Being the 5th largest economy in the world, India aims to be among the top 10 in the Logistics Performance Index by 2030. To achieve this India has to match the pace of South Korea.
In 2018, India was ranked 44th in the Logistics Performance Index.
It creates data-driven Decision Support Systems (DSS) to enable an efficient logistics ecosystem.
The policy targets towards ensuring that logistical issues are minimised, exports grow manifold, and small industries and the people working in them benefit significantly.

Digital Integration System: It leads to seamless and faster work-flow, making logistics significantly more valuable.

Unified Logistics Interface Platform: It aims at collapsing all logistics and transport sector digital services into a single portal, thereby freeing manufacturers and exporters from the present tyranny of long and cumbersome processes.

Ease of Logistics Services: A new digital platform, E logs, is intended to allow industry to directly take up operational issues with government agencies for speedy resolution.
Comprehensive Logistics Action Plan: The Comprehensive Logistics Action Plan includes integrated digital logistics systems, standardised physical assets, benchmark service standards, human resource development, capacity building, development of logistics parks, etc.

Logistics means planning, coordinating, storing, and moving resources, people, raw materials, inventory, equipment, etc., from one location to another, from the production points to consumption, distribution, or other production points.
The term “logistics” includes the total process of controlling the acquisition, storage, and delivery of resources to their targeted location.
It requires locating potential distributors and suppliers and evaluating the viability and accessibility of such parties.