How India’s National Logistics Policy Boosts Supply Chain & Logistics?

It is critical to talk about the logistics sector when we talk economic growth of a country. The agility, growth, and technological innovation of the logistics sector today reflect how efficiently a country moves its resources from one location to another. The fundamental base today is cemented deep with a technological adaptation that offers optimized logistics operations. Saving both time and cost while improving overall operations efficiency. Becoming key drivers of growth for business giving them global leverage to expand.

Realizing the need for operational efficiencies across logistics, the Government of India (GoI) laid down a landmark policy framework in September 2022 with the National Logistics Policy (NLP). Offering a boost to the supply chain environment in the country. NLP was launched by Prime Minister Narendra Modi to revitalize many fields.

Over the past one and a half years, NLP has offered a fundamental policy shift in building a resilient system for quick last-mile delivery, ending transport-related issues, saving manufacturers time and money, and preventing wasting agricultural products. It has led to an overall coordination improvement boosting the logistics sector delivery speed, accuracy, value creation, and most importantly entrepreneurship.

What is the National Logistics Policy?

The Press Information Bureau states that the government-led NLP framework ‘addresses the soft infrastructure and logistics sector development aspect, inter alia, including process reforms, improvement in logistics services, digitization, human resource development, and skilling.’

NLP is built on three essential pillars:

i. integration of digital systems
ii. unification of the platforms used as logistics interfaces, and
iii. ease of logistics

1. Vision

As laid down by the Government of India, NLP aims to drive economic growth and business competitiveness through an integrated, seamless, efficient, reliable, green, sustainable, and cost-effective logistics network. By leveraging state-of-the-art technology, processes, and skilled manpower in the industry. This will help to reduce the logistics cost and improve performance.

2. Objective

The government of India aims to achieve:

a. Reduced cost of logistics in the country
b. Improve the Logistics and Performance Index Ranking, an endeavour of the government to be among the top 25 countries by 2023
c. Create a data-driven strategy mechanism in the logistics sector powered by an efficient logistics ecosystem.

How does the government plan to achieve these targets?

GoI has laid down a Comprehensive Logistics Action Plan (CLAP) to achieve these targets. This includes actions areas like:

a. Integrated Digital Logistics Systems
b. Standardization of Physical Assets and Benchmarking of Services Quality Standards
c. Logistics Human Resources Development and Capacity Building
d. State Engagement
e. EXIM Logistics
f. Services Improvement Framework
g. Sectoral Plans for Efficient Logistics (SPEL)
h. Facilitation of Development of Logistics Parks

What are the significant features of this policy?

NLP brings five key ingredients to the table for the logistics sector:

1. Process re-engineering

The policy aims to improve logistics efficiency with process re-engineering. It involves the identification and elimination of bottlenecks, streamlining documentation processes, and adopting best practices from global examples.

2. Integrated logistic ecosystem

NLP connects many modes of transportation and investment in infrastructure to reduce transit time and increase efficiency across supply chains. The policy encourages the development of logistics parks, warehousing facilities, and transportation networks, leading to overall efficient connectivity.

3. Technology Adoption

NLP’s first and foremost aim is to promote digitization across the logistics sector in India. It embraces cutting-edge technologies like AI, Blockchain, and IoT in logistics operations to improve real-time inventory management.

4. Upskilling people

The successful implementation of NLP lies in the hands of experts who understand logistics sector needs and the policy vision. NLP hence emphasizes training programmes and skill development initiatives to enhance the capabilities of logistics professionals. Improving their skill set will help to build a highly efficient and skilled workforce.

5. Multi-modal transportation

NLP aims to decrease reliance on a single mode of transportation. It encourages multi-mode solutions that are inclusive of roadways, railways, airways, and waterways. Helping to reduce traffic jams and strengthen connectivity.

How has GoI integrated a sustainability and technology push in NLP?

Forward Technology is proving to be a game-changer for India’s logistics sector. As many national policies are embracing digitization, technology solutions are defining GoI’s objectives. A key technology GoI is pushing across policies is the use of Natural Language Processing in everyday projects. Another segment NLP is investing heavily in is environmental sustainability. Considering the logistics sector impacts climate directly with carbon emissions, GoI is also pushing effective technology solutions to reduce the logistics sector’s environmental effects.

Some key tech-related initiatives by GoI :

1. EGovernance

NLP’s objective is to induce the logistics sector with an online system to allot approvals, permits, and licenses. With a push to eliminate the use of paper.

2. Digital platforms

Designing and building necessary digital platforms in the form of mobile applications, websites, and social media assets. These are helping the GoI to simplify communication and make it easier for their customers to access logistics services. Also bringing in transparency in all transactions.

3. Promotion of optimized routes for sustainability

NLP promotes data analytics technology that brings in a data-driven route optimization technology. It lowers total travel time, lowers fuel consumption, and reduces greenhouse gas emissions.

4. Promotion of efficient packaging solutions

The GoI is advancing conversations for efficient packaging. Lobbying for sustainable packaging solutions that help to lower waste and protect the environment from the adverse impact of local packaging.

5. Green Transport promotion

NLP encourages brands to use EV and hybrid solutions to drive green solutions in transportation.
National Logistics Policy brings a competitive edge to the Indian logistics and supply chain sector. It is developing new career opportunities in the logistics marketplace and bringing an infrastructure boom to the country. With its concentration on sustainability, technology, and digitization, the policy is positioned to bring India as an international logistics hub.

Invest India quotes that ‘NLP will thus promote the facilitation of a unified regulatory environment, ensure faster first and last-mile connectivity, and as logistics improve, the export-import, manufacturing, cold storage, and industries will also grow.’

This policy offers us an understanding that the GoI is determined to make the logistics industry stand tall with international standards.

Stay tuned to the MBA-ESG, India, blog for the latest updates and more policy information in the logistics sector.

Author: Mankiran