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Assessment of Logistics Cost in India Report
What’s the News?
- The Government launched a report titled “Assessment of Logistics Cost in India” under the Commerce and Industry Minister Piyush Goyal.
- It provides a uniform, scientifically derived framework to measure logistics costs across transport modes, firm sizes, and product categories.
- The report estimates logistics costs at about 7.97% of India’s GDP, significantly lower than earlier figures of 13-14% drawn from partial or external studies.
Logistics Cost Assessment Report
- Objective: To establish a credible and scientific framework for measuring logistics costs, providing a baseline for monitoring progress and making data-driven policy decisions.
- Key Findings:
- The aggregated logistics cost in India is estimated to be between 7.8% and 8.9% of GDP.
- The cost as a percentage of GDP has shown a declining trend over the last decade, indicating improved efficiency.
- Methodology:
- The report was developed by the National Council of Applied Economic Research (NCAER) for the Department for Promotion of Industry and Internal Trade (DPIIT).
- It uses a robust modeling approach based on secondary data from the Supply Use Tables and National Accounts Statistics.
- Significance: Lower logistics costs are crucial for making Indian goods more competitive in both domestic and international markets, boosting exports, and improving the ease of doing business.
Additional Info
- National Logistics Policy (NLP), 2022:
- Aim: To reduce India’s logistics cost to be comparable with global benchmarks (under 8%) by 2030.
- Targets:
- To be among the top 25 countries in the Logistics Performance Index (LPI) ranking.
- To create an efficient, data-driven logistics ecosystem.
- Key Pillars:
- Unified Logistics Interface Platform (ULIP): A single digital window for all logistics and trade-related services.
- Ease of Logistics Services (E-Logs): A digital platform for industry to directly raise operational issues with the government.
- PM GatiShakti National Master Plan:
- A digital platform launched for integrated planning and coordinated implementation of infrastructure connectivity projects.
- It brings together 16 central government ministries on a single platform to avoid duplication of work, save costs, and ensure timely completion of projects.
- Logistics Performance Index (LPI):
- A benchmarking tool published by the World Bank.
- In the 2023 report, India was ranked 38th among 139 countries, a significant improvement of six places from its 44th rank in 2018.