Decoded: What is National Logistics Policy and how will it get implemented?

Prime Minister Narendra Modi on Saturday launched the National Logistics Policy (NLP) that aims to promote seamless movement of goods across the country and improve the competitiveness of Indian goods in domestic as well as export markets. Let’s understand the government’s road map on how to achieve this:

Why do we need a policy for logistics?
 

During the launch of the NLP, the prime minister said that over the past eight years, the government had been working towards improving connectivity through ‘systemic infrastructure development’ with schemes such as Sagarmala, Bharatmala.

However, logistics cost, which includes transportation, warehousing, inventory, and order processing cost, continues to remain a pain point, considering that higher costs not only adds to the transportation time, thereby making the final price of the goods more expensive, but also hurts competitiveness of domestic goods in the global market. The government aims to address most of these issues through the use of technology and a strict monitoring system.

The policy, which has been in the works for around three-four years, has been brought in tandem with the PM’s ambitious GatiShakti national master plan that was launched to build robust infrastructure and fill the missing gaps in logistics that will ultimately draw more investments into the country.

What are targets under the policy?
 

Logistics cost in India is high as compared to other developed economies. India’s logistics cost as a proportion of gross domestic product (GDP) is believed to be around 13-14 per cent. The government aims to bring it down to single digits as soon as possible. Besides, the endeavour is to be among the top 25 countries by 2030 in the global Logistics Performance Index ranking. India was ranked 44th in the last edition of the index.

How will the policy get implemented and monitored?

The policy will be implemented through a Comprehensive Logistics Action Plan (CLAP), which will include key action areas. For instance, through this policy, 30 existing logistics digital systems across seven ministries and departments, such as FASTag, Port Community systems, Digilocker, are now integrated with a system called Unified Logistics Interface Platform (ULIP) and logistics companies will now be able to procure data with ease, without even logging in to separate portals.

The NLP will address infrastructure and procedural gaps in India’s export-import connectivity to enable greater integration of India with regional and global value chains. It will also facilitate development of logistics parks, with focus on encouraging private investment. The idea is to map them on the GatiShakti national masterplan’s digital portal  to improve visibility, connectivity, and logistics efficiency.

The monitoring and the coordination will be done at the Centre and state levels. An empowered group of secretaries (EGoS) will monitor and review the implementation of the policy. A services improvement group, comprising officers from various ministries, will also be set up by the EGoS for resolution of various issues pertaining to documentation, processes, and policy.

There will be sector-wise plans to increase efficiency. It will address logistics-related issues pertaining to infrastructure, policies as well as regulatory reforms. There will also be focus on optimisation of modal mix.

What role will technology play in the logistics ecosystem?
 

One of the key attempts of NLP is to develop a technologically-enabled logistics ecosystem. A digital dashboard — Ease of Logistics (E-LogS) — is being developed by the industry department for registering, coordinating, and monitoring time-bound resolution of issues. It will contain timelines and status of resolution. Government officials said strict monitoring would ensure that issues are not held up.

Another crucial pillar of NLP is ULIP that will not only benefit various government departments and ministries but also help shippers, truckers, and logistics service providers.

For instance, ULIP can be accessed by truckers to gather information for transport demand. As a result, truckers will be able to reduce empty movement and waiting time, thereby cutting down the operations and maintenance cost. Similarly, shippers will get to monitor real-time cargo movement on a single platform.

When will the government unveil the report?
 

While the PM announced the launch of the policy on Saturday, the report will be unveiled after the approval of the Union Cabinet. Sources said the approval is expected at the earliest.