India improves in the logistics ranking of the World Bank by jumping six places to rank 38 among 139 countries in the seventh edition of Logistics Performance Index (LPI 2023).
India has been taking numerous initiatives since 2015 under the visionary leadership of Prime Minister Narendra Modi to improve its logistics efficiency.
The World Bank has acknowledged India’s efforts towards increasing logistics efficiency. On four out of six LPI indicators, India has seen remarkable improvement on the back of various initiatives being implemented over the past few years, according to the Ministry of commerce and industry release on Wednesday.
“This is a strong indicator of India’s global positioning, with this development being powered by our government’s laser focus on reforms for improving logistics infrastructure. In October 2021, the government of India launched the PM GatiShakti National Master Plan (PMGS-NMP) towards a coordinated approach, leveraging technology, for infrastructure planning and development,” according to the ministry.
PMGS envisages breaking silos among different departments or ministries in states or Union Territories by combining all relevant data on a National Master Plan and State Master Plans (portals), respectively.
It is a geographic information system (GIS)-based tool which integrates existing and proposed infrastructure initiatives of different central Ministries, to ensure first and last-mile connectivity, for seamless movement of people and goods. At the heart is intense communication and extensive data sharing among the central and state agencies promoting a collaborative approach, the ministry said.
Through the power of technology and collaborative efforts of concerned agencies put together, the ministry said PM GatiShakti addresses the emerging needs of transforming the logistics landscape due to factors like rapid urbanisation, changing energy choices, e-commerce, the need to develop resilient supply chains etc.
In September 2022, the Prime Minister launched the National Logistics Policy (NLP) which acts as a guiding document for states/UTs seeking to formulate logistics policy as 19 states or UTs have notified their logistics policy.
The policy is centred around upgradation and digitisation of logistics infrastructure and services, according to the ministry.
Further with a focus on bringing efficiency in services of processes, digital systems, regulatory framework, and human resources, the policy puts marked emphasis on streamlining processes for seamless coordination, and reduction in overall logistics cost, besides incentivising employment generation and skilling of the workforce.
According to the statement, NLP lays emphasis on the shift towards more energy-efficient modes of transportation and greener fuels to reduce the carbon footprint. The policy also focuses on adopting the usage of multimodal transportation and complementing it by building multimodal logistics parks.
Further, it emphasised on the importance of targeted policy reforms to improve the time spent by cargo at ports, airports, and multimodal facilities since most of the delays occur at these locations.
The government also invested in trade-related soft and hard infrastructure connecting port gateways on both coasts to the economic zones in hinterland. Technology has been a critical component of this effort, with implementation under a public-private partnership of a supply chain visibility platform, which has contributed to remarkable reductions of delays, the ministry said.
NICDC’s Logistics Data Bank project applies radio frequency identification (RFID) tags to containers and offers consignees end-to-end tracking of their supply chain. Its implementation started in 2016 on the Western part of India and was scaled up to the pan-India level in 2020.
With such initiatives of transparency, visibility, and ease of doing business, there has been significant improvement in cross-border trade facilitation, the ministry said.
Also, the Logistics Data Bank project promotes healthy competition amongst the ports as it provides information on performance benchmarking, congestion, dwell time, speed, and transit-time analysis.
Over a period, it has also become a repository of data and information relating to the logistics industry and the same is shared with the stakeholders through monthly, quarterly, and annual reports as a source of data for decision-making and improving logistics efficiency, the ministry said.
The LPI report appreciates the Logistics Data Bank which reduces inefficiencies while connecting hinterland to ports.
At a sub-national level, the department for promotion of industry and internal trade (DPIIT) has been conducting Logistics Ease Across Different States (LEADS) study since 2018 which helps to identify and resolve logistics inefficiencies and improve trade facilitation across supply chains.
On a national level, India has notified a productivity-linked incentive (PLI) scheme for the boost to creating global champions in manufacturing, PM Mitra Textile Parks, bulk drug parks, other areas of manufacturing and 43 towns of export excellence meticulously focusing on specific sectors for exports and provision of related infrastructure, according to the commerce ministry.
Resolving the logistics gaps or bottlenecks will help decrease the logistics cost and will lead to an increment in logistics efficiency which will contribute to ongoing reforms aimed at India becoming a global manufacturing or production hub in the coming years.
Further other initiatives, like Sagarmala, which aims to improve connectivity to ports and reduce cargo dwell time and Bharatmala and focus on improving road connectivity of major corridors, have played a pivotal role in improving India’s logistics efficiency, the ministry said.