National Logistics Policy

Syllabus: General Studies Paper 3

The Prime Minister launched the National Logistics Policy (NLP) at Vigyan Bhawan, New Delhi. The launch of the policy a significant step in fulfilling the ‘Pran’ of India being a developed country.

• To ensure quick last mile delivery, end transport-related challenges, save time and money of the manufacturers, prevent wastage of the agro-products, concerted efforts were made and one of the manifestations of those efforts is today’s National Logistics Policy.
• India is the 5th largest economy in the world but the logistics cost is high at around 13-14%.

What is Logistics?

• Logistics encompasses 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.

National Logistics Policy 2022

• The policy focuses on key areas such as process re-engineering, digitisation, and multi-modal transport.
• It is a crucial move as high logistics cost impacts the competitiveness of domestic goods in the international market.
• The need for a national logistics policy was felt since the logistics cost in India is high as compared to other developed economies.

Aim of the National Logistics Policy(NLP)

• Reduce the cost of logistics from 14-18% of GDP to global best practices of 8% by 2030. Countries like the US, South Korea, Singapore, and certain European nations have such a low logistics cost-to-GDP ratio.
• Improve the country’s Logistics Performance Index (LPI) ranking to be among top 25 countries by 2030.
• Create data-driven decision support systems (DSS) to enable an efficient logistics ecosystem.
• To improve the competitiveness of Indian goods both in domestic as well as export markets.

Key Building Blocks of the policy

• Unified Logistics Interface Platform(ULIP): It aims to collapse 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 (E-Logs): It aims to allow the industry to directly take up operational issues with government agencies for speedy resolution.
• Comprehensive Logistics Action Plan: It comprises integrated digital logistics systems, standardization of physical assets, benchmarking service standards, human resource development, capacity building, development of logistics parks etc.

Significance of the Policy

• PM Gati Shakti will get further boost and complementarity with the launch of the National Logistics Policy.
• The Policy will help make the sector an integrated, cost-efficient, resilient, and sustainable logistics ecosystem in the country as it covers all bases of the sector along with streamlining rules and addressing supply-side constraints.
• The policy is an endeavor to improve the competitiveness of Indian goods, enhance economic growth and increase employment opportunities.

Benefits of the policy

• National Logistics Policy has immense potential for development of infrastructure, expansion of business and increasing employment opportunities.
• Improve competitiveness
• Ensuring quick last mile delivery, end transport-related challenges, save time and money of the manufacturers, prevent wastage of the agro-products and improvement in coordination.
• Strengthening of the logistics sector will not only make the life of common man easier but will also help in increasing the respect of labour and workers.
• Issues related to logistics are reduced and when the country’s exports increase, small industries and the people working in them benefit the most.

Way forward

The National Logistics Policy will improve India’s trade competitiveness, create more jobs, improve India’s performance in global rankings and pave the way for India to become a logistics hub.