NLP drives India's efforts to improve logistics efficiency

Logistics costs are declining in India, thanks to multiple initiatives by the governments and the corporate sector.

- Jyothi Shankaran

India is marking two years of the launch of the National Logistics Policy (NLP) in 2024 with improvements in key indicators, and the economy has indeed seen positive impacts of the policy measures as part of the programme.

The targets of the NLP are to: (i) reduce cost of logistics in India; (ii) improve the Logistics Performance Index ranking – endeavour is to be among top 25 countries by 2030, and (iii) create data driven decision support mechanism for an efficient logistics ecosystem.

Unlike earlier estimates that logistics costs are high in India, it has mostly been in high single digits for more than a decade, according to an estimate by National Council of Applied Economic Research (NCAER). The logistics cost has been estimated to be around 8.9 percent of GDP in 2021-22 by NCAER.

India’s performance on the Logistics Performance Index (LP), developed by World Bank, has improved to 38 out of 139 countries, up from 44th in 2018 and 54th in 2014, thanks to focus on developing infrastructure across the country.

"An inter-ministerial team has been formed to improve performance across all six LPI parameters: customs, infrastructure, ease of arranging shipments, quality of logistics services, tracking and tracing, and timeliness," says a written reply by Som Parkash, Union Minister of State for Commerce and Industry, to the Lok Sabha.

Digital reforms such as Unified Logistics Interface Platform (ULIP) for ease of doing business and Logistics Data Bank which has digitised track and trace of 100 percent containerised EXIM cargo, are presently operational, the government said in the reply.