The long-awaited National Logistics Policy, which aims to streamline shipping, and lower costs throughout the country. As the Goods and Services Tax (GST) reform package encouraged investments in cross-state trade, the NLP could help transform the shipping landscape boosting domestic supply chains and enabling Indian businesses to access global value chains.
India has been held back by logistics costs that far exceed its competitors in East and Southeast Asia. The World Bank’s Logistics Performance Index pegs India at 44th globally, behind other Asian competitors such as China, Vietnam, and Thailand. Importantly, India’s performance was dragged down in two measures that are critical to growing and attracting export industries — logistics infrastructure, and the timeliness of clearance process.
One key area is in warehousing, where a lack of standards and regulations has led to interpretations on national policy that differ across states. Greater transparency, and clear and consistent standards in warehousing will help support domestic supply chains, which depend on cross-state trade in high-value added sectors, such as avionics, and healthcare.
While these reforms are part of an essential part of India’s 21st century economic agenda, they will also require massive investments in supporting infrastructure.
With India’s already strong services sector, especially in IT, India will be able to attract global manufacturers that increasingly depend on not just inputs for assembly, but a service sector that can complement it.