The upcoming nationwide logistics policy is predicted to streamline rules and handle supply-side constraints, main to decrease logistics prices and higher competitiveness for Indian merchandise worldwide.
In her Union price range speech on Saturday, finance minister Nirmala Sitharaman mentioned the federal government will launch the policy quickly. “The nationwide logistics policy will make clear the roles of the Union authorities, state governments and key regulators. It will create a single-window e-logistics market and concentrate on the technology of employment, expertise and making medium and small enterprises aggressive.”
India’s logistics sector has remained fragmented and unregulated, regardless of its centrality to financial development. According to a logistics policy draft launched by the commerce ministry in February 2019, the federal government will create a single level of reference for all logistics and commerce facilitation issues, decreasing logistics prices, which at the moment are estimated at 13-14% of GDP, to 10%.
The draft policy has sought to optimize the modal combine (road-60%, rail-31%, water-9%) to international benchmarks (highway – 25-30%, rail – 50-55%, water – 20-25%) and promote the event of multi-modal infrastructure. The policy additionally recommends establishing a Logistics Wing that will likely be “the nodal company tasked to determine key initiatives for driving first mile and final mile connectivity and to optimize the modal combine to determine commodity and the hall for probably the most cost-effective mode of transport.”
Almost 25-30% of fruits and greens produced in India are wasted due to lack of chilly chain infrastructure. According to the draft policy, the Logistics Wing will “work with the ministries of meals processing industries, shopper affairs, meals & public distribution and the division of horticulture in respective states to determine key policy interventions and infrastructure enhancement to promote penetration of chilly chain amenities and adoption of reefer (fridge) vehicles in strategic places.”
“The announcement of the proposed logistics policy is welcome as it’s probably to delineate the roles of the regulatory businesses on the central and state authorities degree and handle points round predictability of laws, registration of companies suppliers, regulation of multi-modal transport and efficiency requirements for service supply,” Arindam Guha, Lead, Government and Public Services, Deloitte India, said. “Many countries, including South Korea and Singapore, came up with this kind of policy in the early 2000s. It covers the different types of logistics service providers. For example, some are just in freight forwarding, others in trucking, some act as full third-party logistics providers. Typically, a policy will categorise each of these services and give minimum threshold requirements for entering the market. For a truck fleet operator, this could be about minimum fleet size, specifications of trucks, axle load and carrying capacity etc,” he mentioned.
R.Okay. Narayan, CEO, Allcargo Logistics and Industrial Parks Pvt. Ltd, mentioned the policy will enable seamless multi-modal freight switch and make freight motion for key commodities cost-efficient. “The proposed policy additionally goals to standardise the important thing parts of a warehouse which is able to lead to new demand and capability creation of Grade A warehouses,” he mentioned.
Guha of Deloitte mentioned the principle problem is whereas a number of the topics coated below the policy come below the Centre, the remaining are managed by states. “The growth of multi-modal logistics parks, or rules to do with motorcar motion, come below states. So, except there’s alignment between the Centre and the states, this policy will likely be laborious to implement,” he mentioned.