Draft National Logistics PolicyIntegrated Logistics Action Plan

Logistics Division, Department of Commerce, Ministry of Commerce and Industry, Government of India

Background

As India endeavors to become a self-reliant USD 5 trillion economy by 2025, a modern and efficientlogistics network has to be developed, to address key challenges such as:

• Fragmentation and unorganized nature of the logistics space

• Complex regulatory environment on account of presence of multiple regulations governed by variousstakeholders

• Highly skewed modal mix with 60% of transportation activities conducted via road, which is highlyfragmented and unorganized

• Low level of technology adoption amongst transport and warehousing players

• High indirect costs on account of unpredictable supply chains and poor first & last mile connectivity

Given the above, the country currently records relatively higher logistics costs - 13% of GDP in 20181

To enhance logistics sector competitiveness, the Ministry of Commerce and Industry, has set up theLogistics Division, which has drafted a “National Logistics Policy” to provide a unified policy environmentand an integrated institutional mechanism, for developing the logistics sector.

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National Logistics Policy – Vision and Objective

Multi-modal Transport Digital Tracking Sector Modernization Excellence in Logistics Logistics Democratization

“To build a modern, efficient, and resilient logistics sector that seamlessly integrates multiple modes of transportation andleverages the best in class technology, processes and skilled manpower in order to significantly improve country’s logistics

performance and reduce logistics costs”

Ensure multi-modal

cargo movement for optimal use of all

transport modes, by

developing multi-modal transport infrastructure,

including MMLPs

Ensure predictability,

visibility and tracking and tracing regarding cargo movement, and

improve in-transit warehousing leveraging

digital initiatives

Support modern trade

and e-commerce, and create resilient supply

chain for effective

emergency response through modernization

of the logistics sector

Promote

professionalization and excellence in logistics services and create

employment opportunities, to

improve quality of life

of workforce

Democratise logistics

services to benefit all

sections of society, in particular the farmers

and micro, small and medium enterprises

(MSMEs)

Vision

Key Objectives

Improve India’s ranking in Logistics Performance Index to 25-30 over next 5 years

Reduce logistics cost in India by 5% of GDP over the next 5 years

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Improve Logistics Performance and Cost

Improve performance

and the efficiency of the logistics sector

with focus on

reducing logistics cost and dwell time

Logistics Efficiency

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Policy Architecture

Five pillars for programmatic interventions, integrating all modes and various stakeholders

Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5

Integrated Logistics

Services

Faster, Cheaper, Safer

Logistics Services

Efficient and Multi

Modal Transport Infrastructure

Modal Shift from Road to

Rail and Water

Logistics for

International Competitiveness

Connecting Local to Global

Meeting Logistics

Needs of Core Sectors of Economy

Driving Efficiency and

Reliability

Logistics for

Emergencies and Disasters

Building Resilience

Logistics Division with

Related Ministries

Ministries of

Civil Aviation, Roads,

Railways, Shipping

Agriculture, MSME & User

Ministries, Railways,

Shipping, Coal, Petroleum

& Natural Gas

Customs, DGFT, PGAs,

EPCs, LPAIMHA, NDMA, MoD, States

Logistics Division shall coordinate and ensure integration with all key stakeholders

Key Government Stakeholders

Pillar 1 - Integrated Logistics Services (1/3)a) National LEAPS (Logistics Efficiency, Advancement, Predictability and Safety) Act – Act to provide a

unified policy and regulatory environment (One Nation-One Contract-One Form) for end-to-endlogistics services and an overarching institutional framework, to govern the logistics sector andenhance its competitiveness.

b) Masterplan for National and State Logistics - Masterplans would be developed at National and Statelevels, covering projects envisaged by various Ministries / Departments to ensure multi-modality,optimal modal mix and addressing first and last mile connectivity. This would factor freight demand,its growth and availability of logistics facilities, and address both hard and soft infrastructurerequirements of the sector.

c) Multi-modal Logistics Parks (MMLPs) - A framework for development of MMLPs would be notified(to be adopted by State Governments / Central Ministries), which would lay down guidelines fornecessary technical requirements/ standards for seamless integration of various modes of transport.

d) Modern Warehousing - A framework for accelerated development of warehousing, addressing keyaspects, including standards, benchmarking and rating, adoption of technology enabled solutionsetc. would be developed. A national register of geo-tagged warehouses would also be developed tofacilitate optimal utilization.

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d) d

e) Standardization - To ensure interoperability of logistics assets and increase efficiency, support wouldbe provided to central/state ministries and private sector to standardize physical assets, equipment,processes, documentation, accounting, and digital payments, promoting excellence in logistics.

f) Professionalization of Logistics Services - A system of registration and accreditation would bedeveloped for logistics service providers, enabling their classification on the basis of service levelsand service types, thereby creating a pool of ‘Excellent Logistics Enterprises’.

g) Digital Transformation - Development of (1) iLog (India Logistics) Platform to provide a single-pointinterface for B2B and B2G processes, allowing secured digital exchange of data, and removinginformation asymmetries in logistics market place, and (2) Logistics Monitor to provide real-timeassessment of utilization and operational performance of logistics infrastructure, and supportplanning for future infrastructure requirements.

h) Skilling, Human Resources and Improving Work Environment - Facilitate (a) designing andimplementation of training programs in partnership with Skill Council, industry stakeholders andacademia and (b) developing skilling eco-system through system of ratings and rewards to enablewider acceptability and recognition of skill certification regimes.

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Pillar 1 - Integrated Logistics Services (2/3)

g) Digital Transformation –

h) This

i) Urban Logistics - City Logistics Plans would be developed to streamline urban logistics and cater tospecific logistics requirements of urban areas, such as, creation of Urban Consolidation Centres,distribution and Pick-up centres, warehousing capacity, etc.

j) Green Logistics – Focus would be on modal shift to railways/ waterways, adoption of fuel-efficient/electric carriers, promotion of re-usable and collapsible containers, rewards and recognition foradoption of eco-friendly practices and promotion of sustainable design standards for developmentof logistics facilities, promoting excellence in green logistics.

k) Research and Innovation in Logistics – A network of academic and research institutions would bedeveloped, driving inter-disciplinary R&D in logistics, and create an integrated eco-system that co-opts academia, businesses, and policy-making institutions. Centres of Excellence focusing oninnovative solutions would be established, in partnership with select institutions.

l) Logistics Start-up Ecosystem - A Logistics Innovators Network (LINE) would be developed promotinginnovation/ cutting edge technologies. An annual accelerator program would be launched inpartnership with Start-up India to invite start-ups to develop innovative solutions, addressingchallenges in the logistics sector.

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Pillar 1 - Integrated Logistics Services (3/3)

a) Promoting Intermodal Transport - Investment in new transport infrastructure to be promoted alongwith requisite technology interventions such as promotion of cargo containerization, innovations inbulk transport handling, and development of Ro-Ro networks, amongst others

b) Ensure Fair and Transparent Regime in Freight Charges, Other Fees and Levies – Develop guidelinesthat promote transparency in freight charges, other fees and levies in the logistics sector and ensurethat such fees and levies are fair, reasonable and promote competition across modes

c) Improving Trucking and Road Transport - A Unified Logistics Interface Platform (ULIP) to bedeveloped, functioning as a freight exchange portal and integrating GST e-way bills, VAHAN databaseto map the flow of freight across the country, helping in enabling infrastructure planning andreducing logistics costs

d) Attracting Freight for Indian Railways - Focus on promoting parcel business through scheduled time-table services, modernization of goods sheds, creation of multi-modal transshipment infrastructurefor first/last mile connectivity, use of electrified double-decker freight trains with horizontal loading/unloading and development of Rail Freight Connectivity Platform connecting all rail freight users

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Pillar 2 – Efficient and Multi-modal Transport Infrastructure (1/2)

d) Promoting

e) Promoting Coastal Shipping and Inland Waterways Transportation - Development of (a) coastalshipping through port-based agglomeration centres, warehouses and coastal berths, and (b) inlandwaterways through coordinated development of first/last mile transport, customized vesselfinancing scheme, construction of river-sea vessels to increase carrying capacity, etc.

f) Air freight for high value and perishables - Air Freight Stations to be developed and co-located withinMMLPs, wherever possible; Utilization of unused air-strips for air freight with specific focus onstorage and air freight of perishable cargo would also be explored

g) Promoting Indian Flag Carriers – Deployment of Indian Flag Carriers in shipping and air cargomovement would be encouraged to achieve self-reliance through supporting ecosystem offinancing, insurance and shipbuilding and repair facilities

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Pillar 2 – Efficient and Multi-modal Transport Infrastructure (2/2)

a) Modernizing logistics for agriculture and allied sectors – Modernize supply chains for agriculture andallied sectors by exploring multi-modal agriculture logistics, development of network of silos/vertical storage of bulk crops, mapping location of temperature controlled storage near farms andkey transport points and mapping optimal transport paths between farms to agglomeration pointsto end customers

b) Driving MSME Competitiveness - Logistics e-marketplace would be developed, providing singlewindow access for all logistics services, including EXIM certifications, at competitive rates, focus onfirst mile connectivity for the MSME sector

c) Logistics for Bulk Cargo - Establish a National Logistics Grid for major bulk commodities viz. coal,iron-ore/steel, fertilizers, food grains, cement and conduct optimization to identify competitivemodes and technology enabled solutions to ensure efficiency and cost optimization

d) Hazardous materials (Hazmat) or Dangerous Goods (DG) and Over Dimensional Cargo (ODC) -Review and streamline the process of transportation and storage of Hazmat, DG, and ODC, with aunified oversight mechanism that ensures compliance by the consignor/ carrier and providesvisibility to the concerned stakeholders

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Pillar 3 - Meeting Logistics need of the Core Sector

a) Improving Infrastructure for International Trade – Development of Integrated Check Posts, co-location of inland customs stations within MMLPs, development of infrastructure for off borderclearances, digitization of infrastructure at LCS/ICPs, and development of Free Trade andWarehousing Zones (FTWZ) to enhance regional/ global trade

b) Streamline Work with Customs and Partner government Agencies (PGAs) – Development of a robustIT platform and Risk Management System (RMS) by adopting ‘One Government Approach’ to enableseamless clearances and approvals from PGAs by streamlining inspections, sampling, testing andissuance of certification to expedite cargo clearance at the port and reduce trade costs

c) Integration with Global Value Chains – Development of Highly Facilitated Trade Corridors (HFTCs), abilateral initiative between an Indian hub port / airport and a key hub port / airport in keydestination market of importance, to support greater integration of Indian businesses with GVCs

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Pillar 4 - Developing International Competitiveness

a) Logistics during COVID 19 Pandemic – Develop a robust response system deploying IT tools toensure logistic operations continuity while addressing the need to re-align routes and ensure safesupply chains

b) Logistics for other emergencies – To restore supply chains impacted by natural disasters andemergency situations, key initiatives would include:

− Development of digital inventory of logistics assets to enhance visibility, accessibility, coordinationand resource optimization

− Support in development of Standard Operating Procedures (SOPs)

− Conduct regular mock preparedness drills to test the readiness and resilience

c) Strategic Logistics Assets – Identification of logistics assets of strategic importance to the militaryoperations in consultation with the Ministry of Defense, and taken up for up-gradation to militarystandards in terms of their design, construction and build quality

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Pillar 5 - Logistics for Emergency Response

Integrated Co-ordination Mechanism at Central and State level to ensure key decision-making, co-ordination amongst key stakeholders, implementation/ project delivery, monitoring of progress, andinteracting with private sector and sector experts

• Institutional construct at the central level comprising:

− Apex level National Logistics Council (NLC)

− Inter-Ministerial Co-ordination Committee (IMCC): Facilitating inter-ministerial coordination

− Central Advisory Committee for Logistics (CACL): Enabling co-ordination with States/ UTs andsupport implementation of Master Plan

− National Logistics Forum (NLF): Enabling engagement with private sector players

• Logistics Division would function as the secretariat for the above bodies and ensure policy alignmentand orchestration of stakeholder actions in policy implementation; Technical Support Unit (TSU) wouldbe set up within the division to develop Master Plan

• At the state level, the logistics division would liaison with:

− State Logistics Co-ordination Committee (SLCC)

− State Logistics Forum (SLF): Enabling interface with the private sector players

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Implementation

• Soft Interventions would be funded by the Central Government through Logistics Division

− Key interventions include Master Plan; Digital initiatives like India Logistics Platform, LogisticsMonitor; accreditation of LSPs, skilling development, fostering research and innovation, promotingstart-up ecosystem, etc.

• Hard interventions in terms of development of transport infrastructure, warehousing, etc. would befunded by respective Central Ministries / State Government

− Support to States / UTs through a Scheme for Multi-Modal and Urban Logistics (SMUL) to plan anddevelop critical logistic infrastructure

• Promote Private Sector participation in multi modal infrastructure, MMLPs and warehousing, etc.through Model Concession Agreements and Financial support to PPP

− Key support scheme/ funds include: Viability Gap Funding (VGF) Scheme, National Investment &Infrastructure Fund (NIIF) and India Infrastructure Project Development Fund

• Implement key tax related interventions viz. (a) streamline and reduce ambiguity on effective tax ratesand compliances to promote multimodal logistics and (b) remove distortions in input tax credit limitingseamless logistics across states

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Financing

• Define key performance indicators for all initiatives using the SMART (i.e., Specific, Measurable,Achievable, Relevant and Time-bound) Framework with target and benefits envisaged

− Design performance dashboards to facilitate monitoring of the key metrics by the concernedstakeholders representing Central Ministries and State Government

− Conduct periodic audits to identify key impediments in policy implementation and provide inputs oncorrective measures for mid-term policy review

• At Global level, logistics performance would be monitored through improvement in ranking related to(a) Logistics Performance Index (LPI) and (b) Trading across Borders in Doing Business (EoDB) for thecountry

• Performance of the logistics sector at domestic level would be monitored leveraging the following:

− Survey on Logistics Ease Across Different States (LEADS) to measure and benchmark logisticsperformance of States / UTs; this would be institutionalized as an annual exercise and improvedfurther by incorporating data on logistics infrastructure

− Bi-annual survey on Logistics Performance Index by Sectors (LoPIS) to be conducted for eight EXIMrelated sectors to improve their performance

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Monitoring and Evaluation

Thank you

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