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Unlike earlier estimates that of its logistics spending results
logistics costs are high in India, it has from inefficiencies in infrastructure.
mostly been in high single digits for Additionally, consumers, who are
more than a decade, according to an generally not interested in paying for
estimate by National Council of Applied transportation overheads, often pay
Economic Research (NCAER). The prices that include transportation
logistics cost has been estimated to be costs. Hence, saving on logistics would
around 8.9 percent of GDP in 2021-22 reduce commodity prices, making India
by NCAER. more competitive in global markets,
India’s performance on the thereby benefiting consumers and
Logistics Performance Index (LP), manufacturers alike. This would
developed by World Bank, has fulfil the NLP’s objective to reduce
improved to 38 out of 139 countries, transportation and logistics costs,
up from 44th in 2018 and 54th in improving market efficiency."
2014, thanks to focus on developing Key achievements of NLP include
infrastructure across the country. Overcoming challenges the integration of technology for
"An inter-ministerial team has been like regulatory delays, smoother freight movement, increased
formed to improve performance across infrastructure gaps focus on infrastructure development,
all six LPI parameters: customs, and skilled workforce and an emphasis on skill development
infrastructure, ease of arranging shortages will be key to in the sector, says Zaiba Sarang,
shipments, quality of logistics services, staying on track. Co-Founder, iThink Logistics.
tracking and tracing, and timeliness," "The policy has also promoted the
says a written reply by Som Parkash, Zaiba Sarang standardisation of logistics processes
Union Minister of State for Commerce iThink Logistics and documentation, which has helped
and Industry, to the Lok Sabha. streamline operations and improve
Digital reforms such as Unified transparency across the board.
Logistics Interface Platform (ULIP) for "In India, logistics is a $200 billion "NLP has played a pivotal role
ease of doing business and Logistics sector with 4.6 billion tonnes of freight in improving India’s ranking on
Data Bank which has digitised track transported annually, 65 percent of the Global Logistics Performance
and trace of 100 percent containerised which is by road and 27 percent of Index. By promoting infrastructure
EXIM cargo, are presently operational, which is by rail," writes Vishnu C. Rajan development, technology adoption
the government said in the reply. & L. R. K. Krishnan in their report and reducing regulatory bottlenecks,
titled Significance and Implications the policy has contributed
of National Logistics Policy of India to greater efficiency and
published in Georgetown Journal of reliability in logistics.
International Affairs. The policy’s focus on
"It is estimated that last-mile multimodal transportation
delivery – the final stage of the delivery and digital integration
process through which the goods reach has directly impacted
the end consumer – costs around 40 performance metrics such
percent of the overall logistics as customs efficiency,
cost. As a result, logistics infrastructure quality, and
constitutes 13-14 percent of shipment tracking."
India’s GDP as opposed to Uday Sharma, Chief
8-11 percent in most major Commercial Officer, Allcargo
economies. Gati had this to say: "The
However, operations at Allcargo Gati
nearly align seamlessly with the
one-third National Logistics Policy
(NLP) and the national

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