Prime Minister Narendra Modi will launch the national logistics policy on Saturday which is aimed at promoting seamless movement of goods and enhancing the competitiveness of the industry.
The policy is expected to focus on areas such as process re-engineering, digitisation, and multi-modal transport.
The move assumes significance 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. It is imperative to reduce the logistics cost in India for improving the competitiveness of Indian goods both in domestic as well as export markets,” an official statement said on Friday.
Reduced logistics cost improves efficiency cutting across various sectors of the economy, encouraging value addition and enterprise.
It said that the policy is an effort to address issues of high cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem.
There is an aim to reduce the logistics cost from about 13 per cent of GDP to 7.5 per cent of the GDP in the coming years.
A comprehensive action plan is proposed under the policy.
Major features of the plan will include – integrated digital logistics systems; unified logistics interface platform; ease of logistics; and standardisation of physical assets and benchmarking service quality standards, state engagement, human resource development and capacity building, export-import logistics, sectoral plans for efficient logistics, and facilitation of the development of logistics parks.
An empowered group of secretaries (EGoS), constituted under the PM Gati Shakti, would monitor and review the implementation of the policy.
A service improvement group would be there for resolution of user issues.
The logistics cost in India is high as against 9-10 per cent in the US and Europe and 11 per cent in Japan.
There is no single department which manages the sector, as it is currently being managed by many ministries including road transport, shipping, railways, civil aviation, posts and commerce and industry, and finance.
According to the commerce ministry, the sector is complex with more than 20 government agencies, 40 PGAs (Partner Government Agencies), 37 export promotion councils, 500 certifications, over 10,000 commodities, and USD 160 billion market size.
It also involves 200 shipping agencies, 36 logistics services, 129 ICDs (Inland Container Depots), 168 CFSs (Container Freight Stations), 50 IT ecosystems, banks and insurance agencies.
The sector provides livelihood to more than 22 million people and improving the sector will facilitate 10 per cent decrease in indirect logistics cost leading to the growth of 5 to 8 per cent in exports, the ministry had stated.
As the per estimates, the worth of Indian logistics market is over USD 200 billion.