National Logistics Policy: A Way Forward towards Digital India?

The much-awaited National Logistics Policy is set to be launched on September 17, 2022 by the Hon’ble Prime Minister Narendra Modi. The NLP was first announced in Budget 2020 and the policy document has been in work since 2019. NEP seeks to establish not only a single point of reference for all the logistics and trade facilitation but also aims to make a highly digital transformation in the logistics sector by increasing digital automation and an integrated digital logistical system to augment the predictability and visibility of the logistics sector.

This will be done by connecting all the logistical sub-sectors in an aligned and coordinated mechanism by creating a data analytics center for driving transparency and continuous monitoring of key logistics metrics. Technologies like Al and block chain will be used to tackle the gap and aim to increase India’s performance in the logistics performance index with the help of a data-driven precision support mechanism for an efficient logistics system.

The policy is a step toward in harmonizing the logistical documents and it further targets to lower the logistics cost in line with global standards by 2030 through a comprehensive action plan and increased digitisation and automation. The implementation of the whole plan would be monitored by the Gati Shakti group by aiming for the seamless movements of goods and services across the country and through a multimodal interconnected infrastructure.

How digitisation will add to the transparency in the logistics sector?

The goal is to establish a single-window portal that will bring together service providers like warehousing providers, shipping experts, logistics supply chains, custom brokers, container suppliers and various government agencies will be unified which will ultimately cater to the transparency and the predictability of the logistics sector.

What’s the present state India’s logistics sector?

Currently, India’s logistics cost stands as high as 14-15% of the GDP as the sector is unorganised and fragmented. Factors such as lack of containers, limited capacity and availability of warehouses increase the cost of transactions. With NLP, the aim is to bring down the contribution of logistics cost to below 9% in the next five years, like other developed countries like the US and Singapore. Thus, the aim is to limit the losses that are incurred due to a lack of organized and monitored logistics system.