Nirmala Sitharaman, the Finance Minister of India, declared in her Budget 2020 speech that the government will soon roll out a national logistics policy. The policy will help in clarifying the roles of Centre, states, and key regulators in logistics. The policy also envisages the creation of a single-window e-logistics marketplace, which facilitates the creation of new jobs, new skill sets, and making MSMEs more productive. A one-stop platform for exporters and importers, the e-logistics marketplace will promote the seamless movement of goods across the country.
Being drawn out by the logistics division under the Commerce Ministry, the policy garners significance as the high cost of logistics within the Indian market impacts the competitiveness of India-made products in global markets. If implemented correctly, the policy will provide a significant boost to cross-border trade and improve export competitiveness, thereby improving India’s ranking in the Logistics Performance Index. The Ministry of Commerce also stated the highly defragmented nature of India’s logistics sector. By 2022, the policy aims to significantly reduce the logistics cost from the current 14% of GDP (Gross Domestic Product) to less than 10%.
With 200 shipping agencies, 36 logistics services providers, 129 ICDs (inland container depots), 168 CFSs (Container Freight Stations), 50 IT ecosystems and banks and insurance agencies, the Indian logistics industry is a behemoth, providing jobs to more than 22 million people across the country. Streamlining the operations of this humongous sector will lead to a 5-8% increase in exports. With the logistics market in India slated to be around $215 billion by the year 2022, an incredible jump from the current $160 billion, the policy will pave the way to making India into a logistics hub.