The National Logistics Policy, 2022
Author: Mr. Sunil Tyagi, Managing Partner & Ms. Nitika Bakshi, Associate at ZEUS Law
Published in asiancommunitynews.com on 31st January 2023
The National Logistics Policy (‘NLP’) of 2022 was notified for implementation with immediate effect from 28th September, 2022 to provide a comprehensive agenda for development of the entire logistics system. The vision of the NLP is to develop a technologically enabled, integrated, cost efficient, resilient, sustainable and trusted logistics ecosystem in India for accelerated and inclusive growth.
The targets set out to be achieved under the NLP are three fold; (i) reducing logistics costs comparable with global benchmarks by 2030; (ii) improving the Logistics Performance Index Ranking – endeavouring to be among the top 25 countries by 2030; and (iii) creating a data-driven decision support mechanism for an efficient logistics ecosystem.
The NLP has comprehensively elaborated on the strategies it plans to adopt for achieving the targets mentioned above. The strategies to be adopted include taking measures to reduce logistics costs by (i) bringing about improvements in transportation by way of moving towards efficient, economical and sustainable methods of transportation, addressing issues of first and last mile connectivity, promoting use of drones, automation, new technologies etc.; (ii) improvement in warehousing through enabling development of warehouses with optimal spatial planning and facilitating private investments in warehouses, use of artificial intelligence/ machine learning/ warehouse automation etc.; (iii) improvement in inventory management by using digitisation to enhance the reliability of supply chains, facilitate tracking, improved visibility of replenishment orders etc.; and (iv) improving efficiency in regulatory matters and order processing to ensure that government policies do not act as an impediment to infrastructure development in the country and promote and support investments made by stakeholders including the private sector.
The NLP also envisages to develop data driven systems to monitor the various components of the logistics ecosystem through the (i) PM GatiShakti National Master; (ii) the Unified Logistics Interface Platform (ULIP); (iii) the Logistics Ease Across Different States (LEADS) study for monitoring performance of the States; and (iv) development of a standard methodology calculate logistics costs and conducting of regular national assessment of the logistics costs in the economy.
The NLP also extensively details the plan of action/ steps proposed to be undertaken for its implementation through a Comprehensive Logistics Action Plan (CLAP). The interventions under the CLAP are divided into 8 (eight) specific key action areas, a detailed overview of which are appended as Appendix A to the NLP.
The NLP also envisages financial and fiscal incentives, by way of review of GST rates, and regulatory interventions for effective implementation of the NLP. Furthermore in areas where immediate mandatory interventions are not advisable, methods such as development of comprehensive recommendatory guidelines, awards to promote best practices, certification of excellence based on pre-decided benchmarks, and digital systems, are also proposed to be adopted for incentivising implementation of the NLP.
The launch of the National Logistics Policy is a welcome initiative for developing a digitized, seamlessly integrated and efficient logistics ecosystem in India. Its emphasis on standardization and benchmarking is expected to improve efficiency, productivity and quality of services in the logistics and warehousing sector. Its focus on digitization and initiatives such as the ULIP will help develop a unified logistics interface seamlessly linking various logistics stakeholders. It is also expected to address the infrastructure and procedural gaps in India’s EXIM connectivity and create efficient, streamlined and reliable logistics network for seamless movement of people and goods across borders facilitating India’s trade competitiveness and greater integration with regional and global value chains. The on-ground impact of the National Logistics Policy remains to be seen. The stakeholders of the logistics and warehousing segment will need to closely follow the action plans, guidelines rolled out from time to time as a part of the NLP’s initiatives.