Boosting Logistics Performance in India

India’s new National Logistics Policy as a driver for green freight

India now has a National Logistics Policy (NLP). It was launched by Hon’ble Prime Minister Sh. Narendra Modi on 17th September 2022 with a vision to develop a technologically enabled, integrated, cost-efficient, resilient, sustainable and trusted logistics ecosystem in the country for accelerated and inclusive growth. This is big news since India is the world’s fifth biggest economy, yet has a logistic performance far below many regional and global peers. 

A significant step for India’s development

Speaking on the occasion, the Prime Minister called the launch of the NLP a significant step in fulfilling the ‘Pran’ (meaning breath in hindi) of India being a developed country. The resulting improvement in coordination will lead to the desired speed in the sector.  

To ensure quick last mile delivery, end transport-related challenges, save time and money of the manufacturers, prevent wastage of the agro-products, concerted efforts were made and one of the manifestations of those efforts is today’s National Logistics Policy.

– Hon’ble Prime Minister Sh. Narendra Modi

Keeping the competitiveness in mind 

The need for a policy was felt since the logistics cost in India is high as compared to other developed economies. It is imperative to reduce the logistics cost in India for improving the competitiveness of Indian goods both in domestic as well as export markets. Reduced logistics cost improves efficiency cutting across various sectors of the economy, encouraging value addition and enterprise. The Prime Minister also claimed that this policy will bring down the logistics cost of businesses from 13-14 per cent to around 8 per cent making India at par with countries like Germany and Japan. 

The NLP will be implemented through a Comprehensive Logistics Action Plan which includes action areas such as integrated digital logistics systems, human resource development and capacity building, National support for action by cities and states, efficiency, or multimodal logistics parks. In addition, the NLP’s implementation will be supported trough the Unified Logistics Interface Platform which combines the data systems on transport and logistics activities by multiple government agencies. The platform will allow to monitor the NLP’s progress and to take well-informed decisions for more efficient and sustainable logistics.

Further information on the NLP and the related initiatives is described in this booklet 2022_NLP India booklet.

Positive impact of sector’s carbon footprint expected

The ‘Climate Friendly Freight Transport in India (Green Freight) project ‘ under the Indo-German development cooperation that Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH implements on behalf German government’s International Climate Initiative has been working closely with the project partner – The Logistics Division, Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry, Government of India in the NLP’s preparation and launch. The policy doesn’t refer explicitly to climate protection, yet many of the planned actions are expected to have a positive impact on the sector’s carbon footprint.  

The NLP and associated plans have been in the works for around three years and GIZ’s Green Freight project has and will continue to contribute significantly to

  1. the e-handbook on warehousing standards
  2. develop logistics plans at city level
  3. prepare an overarching logistics human resource strategy
  4. share knowledge on international best practices for planning and developing an efficient, well connected and reliable multimodal transport and logistics networks in the country and
  5. develop an institutional platform to regularly engage German and Indian companies in the logistics sector to flag issues and collaboratively devise solutions with the partner ministry. 

The Government of India has formulated a clear and ambitious policy agenda for logistic system development. The NLP boosts the profile of logistics as political issue in India, and it will be the key reference for GIZ India’s ongoing support towards environmental sustainability in the freight transport sector.