Draft National Logistics Policy

Integrated 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 efficient
logistics 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 various
stakeholders
• Highly skewed modal mix with 60% of transportation activities conducted via road, which is highly
fragmented 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 the
Logistics Division, which has drafted a “National Logistics Policy” to provide a unified policy environment
and an integrated institutional mechanism, for developing the logistics sector.

1 Source: Armstrong & Associates, Inc., 2

National Logistics Policy – Vision and Objective
“To build a modern, efficient, and resilient logistics sector that seamlessly integrates multiple modes of transportation and
Vision leverages the best in class technology, processes and skilled manpower in order to significantly improve country’s logistics
performance and reduce logistics costs”
Key Objectives
Logistics Efficiency Multi-modal Transport Digital Tracking Sector Modernization Excellence in Logistics Logistics Democratization

Ensure multi-modal Promote

Ensure predictability, Support modern trade Democratise logistics
Improve performance professionalization and
cargo movement for visibility and tracking and e-commerce, and services to benefit all
and the efficiency of excellence in logistics
optimal use of all and tracing regarding create resilient supply sections of society, in
the logistics sector services and create
transport modes, by cargo movement, and chain for effective particular the farmers
with focus on employment
developing multi-modal improve in-transit emergency response and micro, small and
reducing logistics cost opportunities, to
transport infrastructure, warehousing leveraging through modernization medium enterprises
and dwell time improve quality of life
including MMLPs digital initiatives of the logistics sector (MSMEs)
of workforce

Improve Logistics Performance and Cost

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

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

3
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 Efficient and Multi Meeting Logistics Logistics for Logistics for
Services Modal Transport Needs of Core Sectors International Emergencies and
Infrastructure of Economy Competitiveness Disasters

Faster, Cheaper, Safer Modal Shift from Road to Driving Efficiency and Connecting Local to Global Building Resilience
Logistics Services Rail and Water Reliability

Key Government Stakeholders

Ministries of
Logistics Division with
Civil Aviation, Roads,
Related Ministries
Railways, Shipping
Agriculture, MSME & User
Ministries, Railways,
Shipping, Coal, Petroleum
& Natural Gas
Customs, DGFT, PGAs,
MHA, NDMA, MoD, States
EPCs, LPAI

Logistics Division shall coordinate and ensure integration with all key stakeholders

4
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-end
logistics services and an overarching institutional framework, to govern the logistics sector and
enhance its competitiveness.

b) Masterplan for National and State Logistics - Masterplans would be developed at National and State
levels, 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 infrastructure
requirements 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 for
necessary technical requirements/ standards for seamless integration of various modes of transport.

d) Modern Warehousing - A framework for accelerated development of warehousing, addressing key

aspects, including standards, benchmarking and rating, adoption of technology enabled solutions
etc. would be developed. A national register of geo-tagged warehouses would also be developed to
facilitate optimal utilization.
5
Pillar
d) d 1 - Integrated Logistics Services (2/3)

e) Standardization - To ensure interoperability of logistics assets and increase efficiency, support would
be 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 be

developed for logistics service providers, enabling their classification on the basis of service levels
and service types, thereby creating a pool of ‘Excellent Logistics Enterprises’.

g) Digital Transformation - Development of (1) iLog (India Logistics) Platform to provide a single-point
interface for B2B and B2G processes, allowing secured digital exchange of data, and removing
information asymmetries in logistics market place, and (2) Logistics Monitor to provide real-time
assessment of utilization and operational performance of logistics infrastructure, and support
planning for future infrastructure requirements.
h) Skilling, Human Resources and Improving Work Environment - Facilitate (a) designing and
implementation of training programs in partnership with Skill Council, industry stakeholders and
academia and (b) developing skilling eco-system through system of ratings and rewards to enable
wider acceptability and recognition of skill certification regimes.
6
g) Digital Transformation –
Pillar
h) This
1 - Integrated Logistics Services (3/3)
i) Urban Logistics - City Logistics Plans would be developed to streamline urban logistics and cater to
specific 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 for
adoption of eco-friendly practices and promotion of sustainable design standards for development
of logistics facilities, promoting excellence in green logistics.

k) Research and Innovation in Logistics – A network of academic and research institutions would be
developed, 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 on
innovative solutions would be established, in partnership with select institutions.

l) Logistics Start-up Ecosystem - A Logistics Innovators Network (LINE) would be developed promoting
innovation/ cutting edge technologies. An annual accelerator program would be launched in
partnership with Start-up India to invite start-ups to develop innovative solutions, addressing
challenges in the logistics sector.
7
Pillar 2 – Efficient and Multi-modal Transport Infrastructure (1/2)
a) Promoting Intermodal Transport - Investment in new transport infrastructure to be promoted along
with requisite technology interventions such as promotion of cargo containerization, innovations in
bulk transport handling, and development of Ro-Ro networks, amongst others
b) Ensure Fair and Transparent Regime in Freight Charges, Other Fees and Levies – Develop guidelines
that promote transparency in freight charges, other fees and levies in the logistics sector and ensure
that 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 be
developed, functioning as a freight exchange portal and integrating GST e-way bills, VAHAN database
to map the flow of freight across the country, helping in enabling infrastructure planning and
reducing 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 infrastructure
for 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

8
Pillar 2 – Efficient and Multi-modal Transport Infrastructure (2/2)
d) Promoting

e) Promoting Coastal Shipping and Inland Waterways Transportation - Development of (a) coastal
shipping through port-based agglomeration centres, warehouses and coastal berths, and (b) inland
waterways through coordinated development of first/last mile transport, customized vessel
financing 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 within
MMLPs, wherever possible; Utilization of unused air-strips for air freight with specific focus on
storage and air freight of perishable cargo would also be explored

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

9
Pillar 3 - Meeting Logistics need of the Core Sector
a) Modernizing logistics for agriculture and allied sectors – Modernize supply chains for agriculture and
allied 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 and
key transport points and mapping optimal transport paths between farms to agglomeration points
to end customers

b) Driving MSME Competitiveness - Logistics e-marketplace would be developed, providing single

window access for all logistics services, including EXIM certifications, at competitive rates, focus on
first 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 competitive
modes 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 a
unified oversight mechanism that ensures compliance by the consignor/ carrier and provides
visibility to the concerned stakeholders
10
Pillar 4 - Developing International Competitiveness
a) Improving Infrastructure for International Trade – Development of Integrated Check Posts, co-
location of inland customs stations within MMLPs, development of infrastructure for off border
clearances, digitization of infrastructure at LCS/ICPs, and development of Free Trade and
Warehousing Zones (FTWZ) to enhance regional/ global trade

b) Streamline Work with Customs and Partner government Agencies (PGAs) – Development of a robust
IT platform and Risk Management System (RMS) by adopting ‘One Government Approach’ to enable
seamless clearances and approvals from PGAs by streamlining inspections, sampling, testing and
issuance 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), a
bilateral initiative between an Indian hub port / airport and a key hub port / airport in key
destination market of importance, to support greater integration of Indian businesses with GVCs

11
Pillar 5 - Logistics for Emergency Response
a) Logistics during COVID 19 Pandemic – Develop a robust response system deploying IT tools to
ensure logistic operations continuity while addressing the need to re-align routes and ensure safe
supply chains

b) Logistics for other emergencies – To restore supply chains impacted by natural disasters and
emergency situations, key initiatives would include:
− Development of digital inventory of logistics assets to enhance visibility, accessibility, coordination
and 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 military
operations in consultation with the Ministry of Defense, and taken up for up-gradation to military
standards in terms of their design, construction and build quality

12
Implementation
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, and
interacting 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 and
support 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 alignment
and orchestration of stakeholder actions in policy implementation; Technical Support Unit (TSU) would
be 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
13
Financing
• Soft Interventions would be funded by the Central Government through Logistics Division
− Key interventions include Master Plan; Digital initiatives like India Logistics Platform, Logistics
Monitor; accreditation of LSPs, skilling development, fostering research and innovation, promoting
start-up ecosystem, etc.
• Hard interventions in terms of development of transport infrastructure, warehousing, etc. would be
funded by respective Central Ministries / State Government
− Support to States / UTs through a Scheme for Multi-Modal and Urban Logistics (SMUL) to plan and
develop 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 rates
and compliances to promote multimodal logistics and (b) remove distortions in input tax credit limiting
seamless logistics across states
14
Monitoring and Evaluation
• 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 concerned
stakeholders representing Central Ministries and State Government
− Conduct periodic audits to identify key impediments in policy implementation and provide inputs on
corrective 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 the
country
• 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 logistics
performance of States / UTs; this would be institutionalized as an annual exercise and improved
further by incorporating data on logistics infrastructure
− Bi-annual survey on Logistics Performance Index by Sectors (LoPIS) to be conducted for eight EXIM
related sectors to improve their performance
15
Thank you

16