National Logistics Policy 2022

The National Logistics Policy 2022 was just unveiled by the Prime Minister.

Prime Directives

• Goal: To facilitate seamless cross-country flow of products and services while reducing high logistical costs, which are frequently cited as India's major structural trade bottlenecks.

The logistics industry:

• Planning, coordinating, storing, and transferring resources—people, inventories, equipment, raw materials, etc.—from one place to another, from production points to consumption, distribution, or other production locations, are all included in logistics.
• Policy objectives: To measure the policy's success, it has straightforward but transformative objectives.
• By 2030, cut the cost of logistics from 14–18% of GDP to 8%, the level recommended by international standards.
• The logistics cost-to-GDP ratio is very low in countries like the US, South Korea, Singapore, and several European countries.
• By 2030, raise the nation's Logistics Performance Index (LPI) rating to one of the top 25.
• To enable a productive logistics environment, develop data-driven decision support systems (DSS).
• The goal of the programme is to ensure that logistical problems are kept to a minimum, exports increase greatly, and small businesses and the people who work in them significantly profit.

Four essential elements make up the New Logistics Policy:

• Digital system integration (IDS): The IDS integrates 30 separate systems from seven agencies, including data from the departments of road transportation, railroads, customs, aviation, and commerce.
• The Unified Logistics Interface Platform (ULIP) will consolidate all digital services associated with the transportation industry into a single site, relieving exporters of a number of extremely time-consuming and onerous procedures.
• Ease of Logistics (ELOG): A new digital platform called E-Logs, which stands for "Ease of Logistics Services," has also been introduced.
• This will enable businesses to raise operational issues with government organisations directly for a quick resolution.
• System Improvement Group (SIG): Regularly track and address all logistics-related projects' challenges.

Significance

• It is the first comprehensive framework of its sort for the $150 billion logistics industry in the nation.
• The government's efforts to establish a favourable ecology in the logistics industry span eight years and the new logistics policy marks its conclusion.
• Construction of new infrastructure and increased jobs are anticipated benefits of the policy.
• Not only will corporate operations become simpler as the logistics industry is strengthened, but it will also result in a significant increase in employment, better earnings, and better working conditions.
• When used in conjunction with other initiatives, such as the Gati Shakti Programme, the Sagarmala and Bharatmala (road and canal) schemes, the Dedicated Freight Corridors, etc., the NLP has the potential to be transformative.
• Both the ease of doing business and the ease of living will be significantly improved.
• Helps India Become a Developed Nation: Everything should be competitive since India is determined to become an established nation and must now compete more with developed nations.

Challenges

• Rail industry: If the logistics cost is to be cut in half to international standards, the rail sector must quickly address its numerous structural flaws.
• Speed: The typical freight train speed has been 25 kph for decades; it urgently has to be boosted to 50 kph.
• Railways must have a goods operation that is based on a timetable.
• To get access to the high-value small-load market, it must transform into an aggregator of freight at the source and a disaggregation at the destination (as against rake-load goods)
• Waterways: The capacity of Indian ports has greatly grown in recent years, and the average turnaround time for container ships has decreased from 44 to 26 hours.
• We can convey people and goods efficiently and environmentally through rivers.
• The Chinese river ports can teach us important lessons.
• Roads: The road logistics industry is utterly fragmented, and the majority of truck owners have relatively tiny fleets.
• State logistics policies have previously been developed in certain states, including Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Manipur, Mizoram, Rajasthan, Telangana, and Uttar Pradesh.
• 13 states' logistics plans are still in the draught stage.

Rank of the Logistics Performance Index (LPI):

• India's economy is the fifth-largest in the world.
• It must strive to rank among the top 10 in the LPI by 2030 if it is to make the rapid progress necessary to become one of the top three economies and join the group of developed countries.

Way Forward

• The logistics industry has grown stronger as a result of technological use.
• E-sanchit: It has been implementing faceless customs assessment and facilitating paperless export-import trading processes.
• One of the important milestones on India's path to becoming a manufacturing powerhouse is casting the policy.
• Efficiency in logistics can promote a nation's exports, domestic manufacturing, and the attract foreign investors.
• India's goal to have a $5 trillion GDP will depend significantly on the development of its infrastructure.