National Logistics Infrastructure

The backbone of India's international trade is logistics, which aids in the diversification of not only the country's exports but also of products manufactured in the countries.

Potential

  • As per the estimates, the worth of the Indian logistics market will be around $ 215 Bn in the next two years compared to $ 160 Bn.
  • 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.

The NLP (National Logistics Plan) thus aims to promote seamless movement of goods and enhances the competitiveness of Indian industries. Also, it seeks to reduce the logistics cost from 16 per cent of Gross Domestic Product (GDP) to a global average of 8 per cent by 2030.

Challenges

  • High cost of logistics in India comparable to other developed countries.
  • Low Logistics Performance Index ranking.
  • Lack of adequate development of warehouses.
  • Lack of digitization and automation across the logistics value chain.
  • India’s logistics sector is highly defragmented. Only, 10% of Indian logistics belongs to organized sector.
  • India’s logistics sector is very complex with more than 20 government agencies, 40 PGAs, 37 export promotion councils, 500 certifications, 10000 commodities, 160 billion market sizes.

Government Initiatives

To address these challenges, government started National Logistics Policy which would bring down logistics costs, give a fillip to international trade, help in making India ‘atmanirbhar’ or self-reliant, usher in prosperity in the nation and present new opportunities to our startups.

The Policy will be implemented through a Comprehensive Logistics Action Plan (CLAP). The interventions proposed under the CLAP are divided into eight key action areas-

  1. Integrated Digital Logistics Systems
  2. Standardisation of physical assets and benchmarking service quality standards
  3. Logistics Human Resources Development and Capacity Building
  4. State Engagement
  5. EXIM (Export-Import) Logistics
  6. Service Improvement framework
  7. Sectoral Plan for Efficient Logistics
  8. Facilitation of Development of Logistics Parks.

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