National Logistics Policy | Govt to integrate 30 systems from different ministries for faster, cheaper services

India will integrate 30 systems belonging to different ministries to create an integrated digital logistics system for faster, cheaper and safer logistics services.

Prime Minister Narendra Modi launched the National Logistics Policy on September 17. The policy introduces an integrated digital system (IDS) that will bring on one platform departments belonging to ministries of road transport, railways, customs, aviation, foreign trade and commerce. All these departments have their own digital data which will be integrated under IDS. This will help smooth cargo movement.

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“The National Logistics Policy is the first step in reducing logistics costs in India," said Modi in his speech to announce the same. "Performance of all ministries involved in the National Logistics Policy will be key in reducing logistics costs in India.”

India aims to improve its ranking in the logistics performance index to 25-30 from 44 in 2018 and reduce logistics cost to 10 percent of Gross Domestic Product over the next five years. The logistics sector is estimated at 13-14 percent of GDP.

The National Logistics Policy has been keenly awaited after the commerce ministry released a draft logistics policy for consultation in 2019. It was delayed by the Covid-19 pandemic but Finance Minister Nirmala Sitharaman announced it again in the Budget for 2022-23.

The policy will facilitate unified policy and regulatory environment for end-to-end logistics services and an overarching institutional framework that will govern the logistics sector and enhance its competitiveness.

The government, both at centre and state, would prepare a master plan for logistics that will cover projects planned by different ministries to ensure multi-modality, optimal modal mix and addressing first and last mile connectivity.

"Logistics cost needs to be reduced to single digit at the earliest from 13-14 percent. This is a low hanging fruit, we only need efficiency," said Modi.

The policy also makes way for a framework to set up Multi-modal Logistics Parks (MMLPs), which will be adopted by states and central ministries. This aims at seamless integration of various modes of transport. A framework will also be put in place for accelerated development of warehousing, which will address key aspects, such as–standards, benchmarking and rating, adoption of technology enabled solutions.

The digital data integration is a key component of the policy which is aimed at simplifying processes by providing a single-point interface for business-to-business and business-to-government dealing and ensuring secured digital exchange of data.