Mains Daily Question
Feb. 9, 2024
Q1. India's improvement in its Logistics ecosystem is a reflection of the country's overall competitiveness and global positioning. Explain(10M, 150W)
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Approach: Introduction: You can mention the context of World Bank's Logistic Performance Index (LPI) 2023 and India’s improved ranking in the report. Body: Heading 1: Explain the current status of India’s logistics ecosystem in brief to show the country’s overall competitiveness. Heading 2: Try to explain various initiatives that led to India’s improvements in logistics performance. Try to add classification and substantiate with as many government steps as possible. Conclusion: You can tell the way forward for a better logistics ecosystem in India along with the near term goal. You can also summarize the main body points in brief to write a summary based conclusion. |
Answer: Logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to the point of consumption. Recently, India ranked 38th in the World Bank's Logistic Performance Index (LPI) 2023, improving by six places. Also, a Union government report showed that India's logistics costs now stand at less than 9% of the Gross Domestic Product (GDP).
Current status of India’s logistics ecosystem
- The Indian Logistics sector is estimated to be over $250 billion in 2021 and expected to reach $380 billion by 2025.
- The sector provides livelihood to more than 22 million people. It is likely to add 10 million jobs by 2027.
- Logistics industry is presently growing at a 12 percent compounded annual growth rate (CAGR).
Aspects that led to India's improved logistics performance
- Policy Initiatives:
- PM Gati Shakti Initiative: It focuses on multimodal connectivity to reduce logistics costs and stimulate economic growth by 2024-25.
- National Logistics Policy (NLP): Launched in 2022 to address transport-related challenges, and accelerate the logistics sector's speed.
- Infrastructure Development:
- Government's invested in both soft (Unified Logistics Interface Platform (ULIP), E-LogS – Dashboard for Ease of Logistics Services) and hard infrastructure (Scheme for Special Assistance to States for Capital Investment) to connect port gateways with economic centers.
- The Government of India announced allocation of over 10 trillion rupees for infrastructure in the current fiscal year.
- Technology Integration:
- Supply Chain Visibility Platform: Government implemented this through a public-private partnership to reduce delays and enhance the efficiency of logistics operations.
- Digital Transformation: Initiatives like NICDC Logistics Data Services Limited, utilizing RFID tags for container tracking, showcase modernization and digitalization.
- Efficiency Improvements:
- Sagarmala Program: Port Modernization and New Port Development under the ambitious Sagar Mala Program has helped in reducing dwell time at the ports and improved cargo tracking.
As per the latest LEADS report, the Logistics sector will contribute greatly to take India to a 10x growth from USD 3.5 trillion to USD 35 trillion by 2047. India’s next aim is to improve our global logistics ranking, among the top 25 countries. The way ahead for India is promoting nationwide alignment with the National Logistics Policy (NLP), urging states to adopt logistics policies and encouraging private sector investment in warehousing infrastructure.
