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.
