The
Indian logistics industry is one of the most important sectors of the economy,
and it's about to get a lot better. This September, the government released the
National Logistics Policy 2022, which lays out a roadmap for modernisation and
growth.
This policy
is intended to improve the logistics sector's coordination and efficiency, and
it will have a big impact on businesses and consumers alike.
In
this article, we'll take a closer look at the National Logistics Policy 2022
and discuss how it will help India grow.
What Is the National Logistics Policy 2022?
The
National Logistics Policy is a comprehensive and ambitious plan that is
expected to give a boost to the economy of India.
The
National Logistics Policy (NLP) is a Government of India policy initiative
established in 2016. The NLP's ambition is to make India a global logistics hub
by integrating its various transportation infrastructure and services. The
policy also aims to reduce logistics costs, which account for about 14% of the
country's GDP.
To
achieve these goals, the NLP has several key objectives, including:
- Improving transport infrastructure and connectivity
- Promoting the use of technology and automation
- Enhancing last-mile connectivity
- Optimising the use of resources
- Encouraging
private sector investment
The
new Logistics Policy 2022 has three major components:
- Comprehensive
Logistics Action Plan (CLAP)
- Unified
Logistics Interface Platform (ULIP)
- Dashboard
for Ease of Logistics Services (E-LogS)
Among
these three, CLAP acts as a foundation and all measures are implemented. The
objective of the policy is to promote the seamless movement of goods across the
country with minimal transaction costs.
Why Is This Policy Important for India?
The
NLP is currently in its second phase, which will run from 2021 to 2025. In this
phase, the policy aims to improve India's logistics capabilities further,
focusing on reducing logistics costs and improving efficiency.
The
NLP has been widely welcomed by the business community, as it is expected to
boost the country's economy significantly. In particular, the policy is
expected to benefit the export sector, which will become more competitive as
logistics costs are reduced. In addition, the NLP is also likely to create new
jobs in the logistics sector.
One
of the key advantages of this policy is that it will help reduce the cost of
logistics for businesses, which is currently around 14% of the total cost of
goods in India. This will make Indian products more competitive in the global
market.
The
policy also aims to create employment opportunities in the logistics sector. It
is estimated that implementing the policy will lead to the creation of nearly
22 million jobs in the logistics sector by 2025.
This
policy is essential for India for many reasons.
- First, as India's
economy grows, logistics services will continue to increase. The National
Logistics Policy provides a framework for the development of the logistics
sector in India so that it can meet this increasing demand.
- Second, the policy
will help to improve the efficiency of the logistics sector in India, which
will, in turn, reduce the cost of logistics services. This will make it easier
for Indian businesses to compete in the global market.
- Finally, the policy
will help to create jobs in the logistics sector, which will provide
opportunities for the millions of people who are looking for work in India.
The
government is working on various initiatives to improve the infrastructure in
the logistics sector. This includes setting up dedicated freight corridors,
developing multi-modal transport hubs, and improving last-mile connectivity.
What Are the Key Points of the Policy?
The
policy will focus on improving the efficiency of the logistics sector by
integrating various stakeholders such as infrastructure, services, technology,
and data.
In
addition, the NLP will also focus on creating a robust and efficient cold chain
infrastructure to cater to the needs of and healthcare industries. The policy
also aims to promote the use of clean energy in the logistics sector and
increase the use of inland waterways and coastal shipping.
This
sector employs more than 22 million people in India, which through skill
development, is expected to grow at the rate of 5 per cent in 5 years.
The
policy has three main objectives:
- To
promote the development of a competitive logistics sector in India
- To
reduce the cost of logistics for Indian businesses
- To
improve the efficiency of the logistics sector
To
achieve these objectives, the policy sets out a number of measures, including:
-
Establishing a National Logistics Council to coordinate logistics policy across
different government departments
-
Investing in infrastructure, such as building new logistics parks and upgrading
existing ones
-
Encouraging the use of technology to improve the efficiency of the logistics
sector
-
Introducing reforms to make it easier to do business in India
The
policy is an ambitious one and, if successful, will go a long way towards
achieving the government's goal of making India a leading global economic
power.
How Will This Policy Help India Grow?
The
NLP is focused on two key areas:
Integrating
different agencies within the logistics ecosystem and deploying newer
technologies to smooth the process flow. This will help reduce the logistics
cost from 16 per cent of the Gross Domestic Product (GDP) to a global average
of 8 per cent by 2030.
The
policy also aims to create employment opportunities in the sector. It's
expected that the industry will grow at a Compound Annual Growth Rate (CAGR) of
10.5 per cent through 2025 and employ more than 22 million people in India.
To
achieve these objectives, the government has outlined a number of measures in
the policy document. Some of these include: developing an integrated
information system for tracking goods, increasing technology in logistics
operations, and setting up Special Economic Zones for logistics parks.
What Are the Challenges in Implementing This Policy?
It's
no secret that India needs better infrastructure. The country's infrastructure
lags behind other major economies, and that's holding us back from reaching our
full potential.
There
are a lot of projects that need to be completed to bring our infrastructure up
to speed, and that's going to take some time. But we're making progress, and
the government is fully committed to making these projects a reality.
In
the meantime, companies can work on improving their own internal logistics
processes. Plenty of technologies can help make things smoother and more
efficient. And by embracing these technologies, companies can get a head start
preparing for the future of logistics in India.
What Are the Potential Benefits of the Policy?
Simply
put, this policy aims to make life easier for everyone in the logistics sector.
That's business owners, workers, and consumers alike.
In
terms of boosting exports, the policy has identified four main areas of focus:
transportation and infrastructure, information technology and e-commerce,
customs and trade facilitation, and support services. The idea is to make it
easier for companies to ship their products overseas and to make the entire
process more streamlined and efficient.
But
that's not all. The policy also looks to improve the livelihoods of small
business owners and workers in the logistics sector. There are plans to set up
training institutes to provide them with the skills they need to keep up with
changing technologies. This will help to ensure that the workforce is skilled
and up-to-date, which is essential for a thriving economy.
Significant Steps to be Undertaken for NLP
The
first step is to integrate the digital system. This means that all the
different systems of different departments will be connected so that
information can be shared seamlessly and in real-time. This will help reduce
the turnaround time for cargo movement and make things much smoother.
The
second step is to create a Unified Logistics Interface Platform. This will
ensure shorter and smoother cargo movement and enable the exchange of
information confidentially in real time. So agencies will be able to
communicate more effectively, which will lead to a decrease in wastage and an
increase in efficiency.
The
third step is to ease the logistics business through transparency and
accessibility. This will help reduce the cost of doing business and make it
easier for investors to get into the logistics industry.
And
lastly, the fourth step is to set up a System Improvement Group that regularly
monitors all logistics-related projects. This way, any issues can be tackled
quickly and efficiently, and things can run smoothly without glitches.
Bottomline
This
policy will play a huge role in India's growth trajectory. It's about
effectively integrating different agencies and deploying newer technologies to
smoothen the process flow. This is going to help reduce costs and boost
efficiency across the board.
The
result? More goods are getting delivered faster and at lower costs. Sounds
good, doesn't it?
The
government is hopeful that the new logistics policy 2022 will help India
achieve its target of a 15% contribution to GDP from the logistics sector.
If
you're involved in the logistics sector in any way, it's important to stay
up-to-date with all the changes that are expected to take place. Keep an eye on
this space for more updates on the National Logistics Policy 2022.
