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India’s Logistics Sector

Why is it in the news?

  • According to Invest India, India to be among top 25 countries by 2030 in Logistics Performance Index ranking.

About the Logistics Sector

  • Indian logistics sector is expected to reach USD 380 billion by 2025, up from USD 250 billion in 2021.
  • India aims to reduce logistics cost from 13%-14% of GDP to 8%-10% of GDP by 2030.
·       Logistics encompasses transportation and handling of goods between production and consumption points, storage, value addition, and allied services.

·       Logistics infrastructure includes ports, Multimodal Logistics Parks (MMLPs), warehouses, etc.

Advantages of Efficient Logistics Sector:

  • Ensures smooth and efficient supply chain management.
  • Minimizes delays and reduces lead time, crucial for business operations.
  • Fosters economic integration by improving connectivity between regions and markets.
  • Enhances business competitiveness through reduced transportation, storage, and distribution costs.
  • Generates employment in transportation, warehousing, distribution, and related services.

Challenges

  • Fragmented supply chain with numerous small and independent players.
  • Complex regulatory framework and bureaucratic procedures hindering business operations.
  • Lack of qualified personnel proficient in supply chain management.
  • Delays in shipments and increased costs due to lack of coordination between states.

Initiatives Taken to Promote Logistics Sector

  • National Logistics Policy 2022: Promotes seamless flow of goods across the country and improves Indian goods’ competitiveness in domestic and global markets.
  • Multimodal Logistics Parks (MMLPs): Aims to improve the country’s freight logistics sector by enabling efficient inter-modal freight movement to lower overall freight costs and time.
  • Logistics Efficiency Enhancement Programme (LEEP): Designed to improve freight transport efficiency.
  • PM GatiShakti: Initiative to improve logistics efficiency further.

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