National Logistic Policy 2022

National Logistic Policy was much awaited to synchronize and synergise all resources of logistics – rail, road, waterways and air for co-ordinated seamless transportation and warehousing for our industrial sector to boost our economy. — Vinod Johri

On September 17, 2022, the National Logistics Policy (NLP) was launched by the Prime Minister Shri Narendra Modiji. The backbone of Bharat’s international trade is logistics, which facilitates the diversification of not only the country’s exports but also of products manufactured in our country. The NLP thus aims to promote seamless movement of goods and enhances the competitiveness of our industries. The National logistics policy 2022 was deemed necessary because Bharat incurs higher logistics costs than other industrialised nations. We must drastically cut logistics costs if we want to increase the competitiveness of our exports and domestic products. It is a key decision since excessive logistical costs affect how competitive domestic products are on the global market. The primary areas of this National logistics policy 2022 will be process re-engineering, digitization, and multi-modal transportation. The policy envisages an extensive interdisciplinary, cross-sectoral, and multi-jurisdictional framework for the growth of the entire logistics ecosystem in an effort to solve concerns of high cost and inefficiency.

The objectives of the NLP are broadly aimed at enhancing efficiency across the logistics value chain by improving connectivity across destinations, adopting technology, simplifying procedural documentation and strengthening the warehousing sector. The programme aims to ensure that logistical problems are minimized, exports increase significantly and small businesses and the people who work in them earn profits. All this will augment the economy in various ways like employment generation, inter-state, and international exchange of goods. This policy move will bring Bharat closer to becoming a global manufacturing powerhouse and pave its way to becoming a logistics hub. The National Logistic Policy is a significant landmark for Atmanirbhar Bharat.

While we rank 44th on the World Bank’s Logistics Performance Index of 2018, the NLP envisions improving our ranking to feature amongst the top 25 countries by 2030. At least it has to match the pace of South Korea.The NLP proposes to support this upward journey by means of various initiatives.Bharat aims to become $ 5 Trillion economy by 2025. Our logistics sector provides livelihood to more than 22 million people and improving the sector will facilitate 10 % decrease in indirect logistics cost leading to the growth of 5 to 8% in exports. Further, it is estimated that the worth of our logistics market will be around US $ 215 billion in next two years compared to about US $ 160 billion at present.It also seeks to reduce the logistics cost from 16 per cent of Gross Domestic Product (GDP) to a global average of 8 per cent by 2030.  Investment Information and Credit Rating Agency of India Limited (ICRA) estimates that the sector will develop at a Compound Annual Growth Rate (CAGR) of 10.5 per cent through 2025 after growing at a CAGR of 7.8 per cent over the past five years. 

NLP provides the required boost for connectivity and robust infrastructure. This policy will augment warehousing capacity and enable faster communication to take products closer to their consumption points. NLP will also bring new energy to all other sectors. As logistics develop, manufacturing, production, automobile, and other industries like warehousing and infrastructure development will also develop. This will spur the growth of commercial real estate and industrial parks. 

NLP will thus promote the facilitation of a unified regulatory environment and institutional framework governing the sector that will set up multi-modal logistics parks (MMLPs) as key markets. This will ensure faster first and last-mile connectivity, and as logistics improve, the export-import, manufacturing, cold storage, and industries will also grow.

The Comprehensive Logistics Action Plan (CLAP) envisaged in the NLP identifies the following action areas wherein the policy aims to undertake interventions:

1.    Developing an ‘Integrated Digital Logistics Systems’ to create a cross-sectoral database for logistics stakeholders.
2.    Setting standardisation norms for assets and benchmarking quality of services.
3.    Developing human resource and skill building aligned towards logistics by the ministries involved in different sectors.
4.    Supporting state level logistics plans and institutional framework development.
5.    Streamlining EXIM (export-import) processes to improve trade competitiveness and integration with global value chains.
6.    Improving regulatory interface in the logistics sector.
7.    Formulating ‘Sectoral Plans for Efficient Logistics’ in different sectors to complement the development of facilitative processes in logistics management.
8.    Developing a network of logistics parks, including Multi-Modal Logistics Parks (MMLPs), by providing framework guidelines for the development of these parks and encouraging private sector investment in the same.

The NLP provides for development of two main portals, viz., the Unified Logistics Interface Platform (ULIP) and Dashboard for Ease of Logistics Services (E-Logs), to provide digital platforms that facilitate the regulatory and operational processes in the logistics sector.

The salient features of the NLP 2022 may be summarized as under:
1.    The road, rail, customs, aviation, international trade, and commerce ministries are among the seven departments (like road transport, railways, aviation, commerce ministries and foreign trade)whose 30 distinct systems will be digitally integrated as part of the Integration of Digital System (IDS).
2.    The shorter cargo movement will be improved.
3.    Unified Logistics Interface Platform (ULIP): This ensures shorter and smoother cargo movement and enables the exchange of information confidentially on a real-time basis. This National Industrial Corridor Development Corporation (NICDC) Logistics Data Bank Project has been leveraged.
4.    There will be Ease of Logistics (ELOG) present. The policy will be put into place to streamline the regulations and make the logistics industry easier.
5.    The System Improvement Group (SIG) is tasked with periodically assessing all logistics-related projects & removing any barriers.
6.    The goal of the policy is to give young people opportunity to work and develop their talents.

The NLP’s transformational capacities further increase when combined with previous connectivity and infrastructure improvement programs -
1.    The Gati Shakti Programme’s goal is to implement infrastructure connectivity, including roadways and railways projects across the nation, in a coordinated manner.
2.    The Sagarmala envisions using the potential of the coastline and waterways to reduce the amount of infrastructure needed to reach their targets.
3.    The Bharatmala focuses on reducing critical infrastructure gaps to increase the effectiveness of road traffic circulation across the nation.

National Logistic Policy was much awaited to synchronize and synergise all resources of logistics – rail, road, waterways and air for co-ordinated seamless transportation and warehousing for our industrial sector to boost our economy and ambitiously achieve target of US $ 5 Trillion economy by the year 2025 and US$ 10 Trillion economy by 2030. NLP 2022 will certainly achieve these targets. qq

(Source : Economic Times, Indian Express, NAMO APP, pmmodiyojana.in, jagranjosh.com, lexology.com)

Vinod Johri: Retd. Addl. Commissioner of Income Tax.

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