National Logistics Policy: India's New Framework to cut down logistics cost

Updated on July 18, 2023

It is imperative for India to capture the world markets by strengthening the support system.  The government is planning to create a single point of reference for all logistics and trade facilitation matters that will eliminate difficulties related to logistics in the next 5 years by 10%. In 2019, a draft logistic policy was released, but its implementation was delayed due to the Covid-19 pandemic.

Prime Minister Narendra Modi launched the National Logistics Policy (NLP) on 17th September, 2022 to bring down the high freight shipping cost in India by 13-14 percent.  This new ‘National Logistics Policy’ will help in making the support system modern. The policy aims to create world-class logistics networks and make them economically sustainable. He further called it a “solution” for many problems including farmer distress and food security.

The Prime Minister has directed the development of a "reliable, robust and efficient" supply chain for next-gen technologies, a move that will accelerate last mile delivery and address major challenges. The new policy aims to progress last-mile delivery, which is critical for India's digital economy. It also aims to support innovative business models that would lead to improvements in “all our systems”.

India's development journey will be accelerated with the launch of the Logistics Policy today, the PM said.

The Background

India's logistics costs are high compared to other developed economies, making the need for a national logistics policy evident. The Logistics Policy aims to reduce freight shipping cost in the economy and improve productivity, create wealth and facilitate greater competitiveness. With rapid increase in the number of establishments in India, the need for logistics planning is more prominent now than it ever has been. Logistics services cost is one of the biggest impediments to productivity and competitiveness, which is thus measured as a loss to the economy.

• Since 2014 the government has put significant effort to promote ease of doing business and ease of living for the people.

• Logistics Policy aims to lay down an overarching framework for the development of the entire logistics ecosystem.

• National Logistics Policy is a comprehensive effort to address issues of logistics services cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem, is yet another step in this direction.

• The policy is an endeavor to improve the competitiveness of Indian goods, enhance economic growth and increase employment opportunities

Glimpse of National Logistics Policy

Addressing the Policy, Hon'ble Prime Minister announced the following changes that would substantially reduce the logistics costs across the entire supply chain and has the potential to usher in “ease of moving” in the country.

Source: pib.giv.in

• “The notion that India is emerging as a manufacturing hub is stabilizing in the mind of the world”

• “Policy is just a beginning, policy plus performance is equal to progress”

• “National Logistics Policy has not come out of the blue, there are 8 years of hard work behind it”

• “From 13-14 percent logistics cost, we should all aim to bring it to single-digit as soon as possible”

• “Unified Logistics Interface Platform- ULIP will bring all the digital services related with the transportation sector on a single portal”

• “Gatishakti and National Logistics Policy together are now taking the country towards a new work culture”

• “India, which is determined to become developed, now has to compete more with developed countries, so everything should be competitive”

• “National Logistics Policy has immense potential for development of infrastructure, expansion of business and increasing employment opportunities”

Source: pib.giv.in

What is the need of National Logistics Policy ?

PM's vision has always been to develop world-class modern infrastructure through the integrated planning and implementation of all stakeholders in order to maximize efficiency and synergy throughout the project. The National Master Plan for muti-modal connectivity, PM GatiShakti launched last year, was a pioneering step in this direction and will get further boost and complementarity with the launch of the Logistics Policy.

The Prime Minister said that the Logistics Policy is a significant step in fulfilling the ‘Pran’ of India being a developed country. He further added that “To ensure quick last mile delivery, end transport-related challenges, save time and money of the manufacturers, prevent wastage of the agro products”, concerted efforts were made by the government and one of its manifestations is today’s National Logistics Policy. He further explained that this policy would lead to improvement in coordination which will result in improved speed in Sector.

India has become the 5th largest economy in the world and things are changing rapidly here. Referring to the release of Cheetah, the Prime Minister said we all want that luggage should move quickly like a cheetah.

Prime Minister Narendra Modi said that India's transformation into a self-reliant country can be heard everywhere. Despite setting high export targets, India is achieving them. The world is stabilizing its perception that India is becoming a manufacturing hub. It is evident that the world has accepted the PLI scheme if we study it."

Significance of National Logistics Policy 2022

• Having the National Logistics Policy launch will give PM Gati Shakti a further boost and complementarity.

• This policy will enhance the country's logistics ecosystem by making it cost-efficient, resilient, and sustainable by covering all aspects of the industry while streamlining rules and addressing supply-side constraints.

• It aims to improve Indian goods' competitiveness, boost economic growth, and create jobs.

How FreightMango can help you?

FreightMango is a centralized digital platform that lets you compare prices and help in the booking to clearance process that gives you a hassle free shipping experience. We provide you with updated prices for various tradelanes so you can ship your cargo at a cost-effective price and track it live online. So, what are you waiting for? An important step towards development of the logistics sector has been made with the launch of the National Logistics Policy. There is valuable learning and now is the time to give wings to ocean freight and drastically improve the transportation of high value and perishable items.