Commerce Ministry launches National Logistics Plan

India has kicked off an ambitious National Logistics Plan to allow seamless movement of inputs and finished goods across the Country. Through the plan, the Government aims to come out with the most cost-effective method to transport goods till 2035 to provide a competitive edge to the Indian industry.

In a first-of-its-kind move, the newly setup logistics division in the Commerce Department is in talks with logistics providing Ministries of Railways, Roadways, Shipping, Inland Waterways and Civil Aviation besides the logistics using Ministries including food processing, coal and mines to chalk out the plan.

“We are making the plan without intruding in others’ territory. The idea is to have various means of transport to complement each other and not compete,” said a Commerce Department official.

Various industry estimates have put the size of the Indian logistics market at $100-125 billion and growing at 5% per annum. However, Indian logistics costs are said to be one of the highest in the world at almost 13% of the gross domestic product.

“While we continue to make long-term plans, we should also look at the low hanging fruit such as digitising and reducing the number of documents required,” said Ajay Sahai, Director General of Federation of Indian Exports Organisation.

The department is seeking the user Ministries’ requirement of transporting their goods till 2035 based on their origin and destination after which it will come out with the most cost-efficient way of movement and reduce logistics costs.

An expert on trade issues said the Commerce Department should project its requirement with the other Ministries and intervene in case of a shortfall. Globally, coastal transportation is the most favoured way followed by railways and then roads. But the trend is reverse in India.

The logistics division is already creating an IT backbone to develop a National Logistics Information Portal, which will also be an online logistics marketplace aimed to bring together the various stakeholders.