World bank logistic performance index 2023

• India is now ranked 38th out of 139 nations in the Logistic Performance Index (LPI) 2023 of the World Bank.
• From its previous rankings of 44th in 2018 and 54th in 2014, this is a notable improvement.
• Earlier, the Logistics Ease Across Different States (LEADS) Report 2022 was published by the Ministry of Commerce and Industry.

About Logistics Performance Index (LPI)

• It was developed as an interactive benchmarking tool to assist nations in identifying the possibilities and problems they have in their performance on trade logistics and what they can do to enhance their performance.
• Six factors are used to analyse various nations:
• efficiency of border and customs management clearance.
• infrastructure relates to trade and transportation quality.
• the simplicity of organising inexpensive overseas shipments.
• the proficiency and excellence of logistical services.
• the capability of tracking and tracing shipments.
• the regularity with which deliveries arrive at recipients before or on time as promised.
• 139 nations can be compared using the International LPI 2023.
• Finland and Singapore are this year's Top Performers.

Logistics Industry

• The logistics sector includes all aspects of the supply chain, primarily transportation, inventory control, information flow, and customer support.
• For a nation's economy to function, logistics are crucial. It has to do with how resources are generally gathered, stored, and transported to their final destination.
• With the underlying presumption of a powerful logistics industry, it is a differentiating sector that can significantly impact any country's exports, hence adding a substantial competitive edge.
• It determines the effectiveness of the nation's supply chain as well as having an impact on it globally.

What elements contributed to India's enhanced logistical performance?

• PM Gati Shakti Initiative: The government unveiled the PM Gati Shakti programme, a National Master Plan for multimodal connectivity, in October 2021.
• By 2024–25, this project hopes to increase economic growth and lower logistics costs.
• The National Logistics Plan (NLP) The National Logistics Policy (NLP), introduced by the PM in 2022, aims to ensure rapid last-mile delivery, eliminate transportation-related problems, save manufacturing companies time and money, and assure the desired speed in the logistics industry.
• India's increase in LPI and other indicators demonstrates the success of these policy actions.
• India rose five positions in the infrastructure score from 52nd in 2018 to 47th in 2023, according to the LPI research.
• The government has made investments in trade-related soft and hard infrastructure to link the key economic hubs situated in the country's interior regions to port gateways on both coasts.
• India rose from 44th place in 2018 to 22nd place for foreign shipments in 2023 as a result of this investment.
• India's efforts to improve its logistics performance have mostly relied on technology.
• The government has created a platform for supply chain visibility through a public-private collaboration, which has helped to significantly reduce delays.

India's Potential

• Infrastructure, technology, and the appearance of new service providers are all contributing to the rapid growth of the logistics business in India by lowering logistics costs and offering high-quality services.
• Additionally, government regulations and taxation policies have a significant impact on the sector's innovation.
• According to certain figures used by the government, India's logistics expenditures account for roughly 13–14% of its GDP.
• In contrast to the global norm of 8%, India's logistics expenses have ranged between 14 and 18 per cent of GDP, according to the Economic Survey 2022–23.

Government Initiatives

• Logistics Master Plan: Rather than adopting an industry-based strategy, this project adopts a regional strategy. The strategy will incorporate a number of initiatives and tasks to increase the proportion of intermodal and/or multimodal transportation. Accordingly, the coordinated construction of necessary infrastructure (such as utility and gas pipelines and optical fibre cable networks) is planned.
• Federal Logistics Regulations: A draught national logistics law is currently undergoing consultation. The One Nation, One Market goal would be supported by a unified legal framework for the One Nation, One Contract paradigm, which would also offer a flexible regulatory environment (one bill of lading across modes).
• The PM Gati Shakti programme, a National Master Plan for multimodal connectivity, was unveiled by the government led by Prime Minister Narendra Modi in October 2021 with the goal of lowering logistics costs and boosting the economy by 2024–2025.
• The National Logistics Policy (NLP), introduced by the Prime Minister in 2022, was created to provide speedy last-mile delivery, put a stop to transportation-related problems, save time and money for the industrial sector, and ensure the desired speed in the logistics sector.

Way forward

• The government's actions will boost the logistics industry's development.
• Increased efficiency in the movement and storage of goods across the nation will result from integration in the form of a multimodal network of transportation and warehousing.
• In order to eliminate waste and promote quicker delivery of commodities from port to port, city to city, and state to state, there is also a need for better warehousing, cold storage facilities, and expanded first and last-mile connectivity.