India’s action plan to make Logistics sector competitive

India’s action plan to make Logistics sector competitive



National Logistics Policy –India’s action plan to make the Logistics sector competitive


On 17th September 2022, Prime Minister Narendra Modi unveiled the National Logistics Policy. This policy aims to make India’s Logistics sector highly competitive, reduce costs, and improve efficiency across business functions. In addition to this, the policy aims to leverage digitisation and the creation of unified systems to integrate the entire Logistics ecosystem. Precisely, NLP is a future-proof plan that could make India the next global factory. What is this policy all about? What are salient features and how will digitisation facilitate this transformation?


Objective of NLP


The Logistics industry today is facing numerous challenges ranging from manual documentation, lack of visibility, congestion, and high cost. The objective of NLP is to create an ecosystem that is well-modernised and seamless. In turn, it will ensure the efficient functioning of the entire ecosystem and resolve all the long-pressing challenges the industry faces. The policy also aims to reduce the cost of Logistics from 13-14 per cent to single digits in order to make the industry globally competitive.


Significant measures to be undertaken under NLP


Here are some measures to ensure the collective objective is met:


  • Integrations: Industry stalwarts say that a country should have a strong Air, Maritime, and Railway transport system simultaneously. And to move cargo rapidly from one end to the other, leveraging all these modes will be of optimal importance. NLP aims to leverage them all these modes and integrate into one fold.

  • Unified Portal: NLP’s prime objective is to build a unified interface that enables shorter and smoother cargo movement. Also, this unified portal will bring a whole new level of information security while being exchanged between the stakeholders.

  • Bolstering Ease of Logistics: Contemplating the need to connect all stakeholders from different modes, NLP is focused on bolstering the ease of Logistics in the country. Through this measure, the mismatch between demand-supply shall get addressed on a pan-India basis. Added to that, it will bring a whole new level of transparency to the nationwide Logistics


How digitisation facilitates transformation?


Certain Ports have leveraged digitisation and achieved significant gains in recent times. Increases in capacity, faster turnaround time, paperless documentation, etc. are some of the major benefits reaped out of digitisation. Faster IGST returns, India ranks 6 in e-AWB adoption, and FASTag are some crucial initiatives. Along similar lines, digitisation across the country in all Ports and Airports will not only improve the global competitiveness of the Indian Logistics Industry but will also ensure India ranks higher in terms of ease of doing business worldwide.


Combining NLP with other infrastructure projects


The sole purpose of NLP and all other initiatives will be achieved when they are all integrated and work towards achieving a single objective. The government of India, in recent years, has promoted a series of projects, which are meant to improve infrastructure and connectivity. By coupling NLP and other plans such as PM Gati Shakti, Sagarmala and Bharatmala, not only will the industry achieve, but the country will emerge as the undisputed global manufacturing hub. For example, Bharatmala focuses on eliminating the critical gaps in infrastructure projects and improving the effectiveness of road traffic circulation across India. On the other hand, Gati Shakti aims to encourage infrastructure connectivity by leveraging railways and roadways along with Maritime and Air transport. Sagarmala focuses on leveraging inland waterways and the coastline to transport cargo efficiently.


Feasible targets optimal results


The comprehensive Logistics Action Plan sets a target for India to be among the Top 25 countries by 2030 in the Logistics Performance Index. And it sets a target to reduce the cost of Logistics that is in line with the global benchmarks. Industry experts believe these targets are feasible to achieve and will lead to optimal results in the next few years. Therefore, NLP is a game-changing effort, and its impact will be felt across the Logistics sector in the coming days.


Cargo Community Systems driving digital trade facilitation


Kale Logistics Solutions has been at the forefront of conceptualising and implementing next-gen Cargo Community Systems (CCS) globally. Currently, it is engaging with more than 100 air cargo stations globally and driving 85% of India’s air cargo traffic. Cargo Community Systems connect all supply chain stakeholders on a common platform and are setting the trend for digital transformation at Airports in India. CCS offers the perfect Air Cargo Single Window for current problems related to congestion, higher dwell times, paperwork, and supply chain opaqueness. On the Maritime side, the Port Community System from Kale has helped Indian exporters get IGST refunds in 7 days from 90 days. Similarly, it has improved container throughput by 75% at the VOC Tuticorin Port in India.