The Indian government is reportedly finalising the Draft National Logistics Policy, which aims to identify bottlenecks and bridge the gaps prevailing in the sector. Last month, on February 5, the Ministry of Commerce had published the draft policy and opened the issue for public discussions.
“We have incorporated most of the comments and suggestions made by the stakeholders. We are hopeful that the final policy will be out in a month’s time,” commerce ministry’s logistics special secretary N Sivasailam told PTI.
The policy is being prepared by the logistics division within the commerce ministry. Last year in June, minister of Commerce & Industry and Civil Aviation, Suresh Prabhu, said that the government plans to come up with an integrated logistics policy to boost the sector.
The new logistics division within the Department of Commerce is preparing the national logistics policy, with charges to come up with an integrated plan by way of policy changes, improvement in existing procedures, and the introduction of technology-based interventions.
Accordingly, the logistics division came up with a draft, which according to Sivasailam, aims to provide an impetus to trade, enhance export competitiveness, improve India’s ranking in the Logistics Performance Index to between 25 and 30, among other initiatives.
The Draft National Logistics Policy 2018, notes that India’s logistics sector is highly unorganised and that its cost is very high at 13-14% of GDP, as compared to other countries such as the US at 9-10%, Europe at 10%, Japan at 11%.
The policy aims to inform, clarify, strengthen and prioritise the key objectives, and the governance framework for logistics in India, along with clarifying the role of the various stakeholders. Here are a few other key objectives the policy aims to achieve in the next five years:
- A national logistics online marketplace to simplify trade documentation
- Incentivise logistics to make it more efficient
- A data and analytics center for monitoring key logistics metrics
- A center of excellence to drive innovation
- An Integrated National Logistics Action Plan for all logistics related development
Further, the policy envisages to create employment opportunities for 10 Mn -15 Mn people and also focus on enhancing skills in the sector, while trying to improve India’s ranking in the Logistics Performance Index to between 25 to 30.
It also aims to promote cross-regional trade on ecommerce platforms by enabling a seamless flow. The government has recently mandated foreign ecommerce players to have a registered business entity in India in order to carry out their operations.
The policy has further proposed setting up of four committees/councils, namely — National Council for Logistics, Apex inter-ministerial Committee, India Logistics Forum, and Empowered Task Force on logistics.
“This initiative will help spur a lot of technological and process innovation in the sector. It would make it easier for logistics startups to reach out to SME’s with their services. It would also help create meaningful employment across the value chain, be it first mile, last mile, or warehousing,” logistics startup Shadowfax business development vice-president Rohit Gupta said.
Logistics is the brain behind the supply chain industry. The sector is currently valued at $160 Bn and is poised to hit $215 Bn by 2020.
According to Inc42’s State of The Indian Startup Ecosystem 2018 Report, India had over 900 logistics startups as of November 2018. Between 2014 and 2018, these startups have raised over $1.4 Bn funding across 115 deals.