Government of India’s Draft National Logistics Policy Outlines Trade Growth

By Chandranath Dey, Head of Industrial Operations, Business Development, Industrial Consulting & Supply Chain Consulting, JLL

The Policy provides the much-awaited clarity in strategies to transform the Indian Logistics into an organised sector with a consolidated problem solving approach. However, time-bound definitive execution plan by the government is mandatory to achieve its desired objective and extracting underlying benefits 

• The Logistics sector in its current form is a complex puzzle for the industry to optimise cost and delivery time
• The much-awaited India Logistics Policy highlights vision to transform India’s Logistics sector into an integrated, seamless, efficient, reliable, cost-effective and technology-driven eco-system
• It is expected to bring down logistics cost from 14% to 10% of GDP
• Appropriate execution of the Policy, hopefully, can create a supply chain environment for achieving its desired efficiency and effectiveness.

The Logistics and Warehousing sector has entered a new growth phase and continues to evolve. From getting the infrastructure status in late 2017 to an increase in investments in 2018 it received as a result of the status has resulted in growth and expansion. Having realised the growth potential of the sector the government wishes to institutionalise the market. Government’s newly drafted National Logistics Policy aims to do just that.

It is worth mentioning that the Logistics Plan is now the most important element in bridging the gap between producers and consumers. It deals with extensive location range, diversified distribution chain, several layers of human intervention and diversity in product type. The ultimate goal is to optimise time and cost to be competitive and maintain customer satisfaction.

However, the Sector in its current form is a complex puzzle for the industry!

The government defines the country’s logistics sector as highly fragmented. Currently, the sector comprises of four ministries (Railways, Road Transport and Highways, Shipping and Civil Aviation), ~100 Government bodies[1], 10,000⁺ Commodities and 12 million employees. And, the sector operates with several organised and unorganised operators and services providers. Under this complex platform, the Ministry is set to notify a common vision and goal for creating a co-operative environment for the sector. 

The key takeaways from the policy

The much-awaited India Logistics Policy highlights vision to transform India’s Logistics sector into an integrated, seamless, efficient, reliable, cost-effective and technology-driven eco-system and is expected to bring down logistics cost from 14% to 10% of GDP. The key goals and initiatives of the policy are as follows:

Digital platform for MSME[1] for providing single window certification, transparent price recovery and direct access to consumers barring intermediaries.