India has jumped six places in the logistics ranking of the World Bank and is now ranked 38 out of 139 countries in the 7th edition of the Logistics Performance Index (LPI 2023). This improvement is a result of various initiatives implemented over the past few years to improve the logistics efficiency of India.
Remarkable Improvements on LPI Indicators
India has seen remarkable improvement in four out of six LPI indicators, which are customs, infrastructure, international shipments, and tracking and tracing. This has been possible due to the government’s focus on reforms for improving logistics infrastructure under the visionary leadership of Prime Minister Shri Narendra Modi.
Acknowledgment of NICDC’s Logistics Data Bank
The LPI report acknowledges NICDC’s Logistics Data Bank, which applies radio frequency identification (RFID) tags to containers and offers consignees end-to-end tracking of their supply chain. The project promotes transparency, visibility, and ease of doing business, which has led to significant improvement in cross-border trade facilitation.
Initiatives to Improve Logistics Infrastructure
In October 2021, the Government of India launched the PM GatiShakti National Master Plan (PMGS-NMP), which focuses on a coordinated approach, leveraging technology, for infrastructure planning and development. PMGS envisages breaking silos among different Departments/Ministries in States/UTs by combining all relevant data on a National Master Plan and State Master Plans (portals) respectively.
The National Logistics Policy (NLP), launched in September 2022 by the Prime Minister, acts as a guiding document for States/UTs seeking to formulate logistics policy. The policy lays emphasis on the shift towards more energy-efficient modes of transportation and greener fuels to reduce the carbon footprint. It also focuses on adopting the usage of multimodal transportation and complementing it by building multimodal logistics parks. Further, it emphasizes the importance of targeted policy reforms to improve the time spent by cargo at port, airports, and multimodal facilities.
Investment in Trade-Related Infrastructure
The government has also invested in trade-related soft and hard infrastructure connecting port gateways on both coasts to the economic zones in hinterland. Technology has been a critical component of this effort, with implementation under a public-private partnership of a supply chain visibility platform, which has contributed to remarkable reductions of delays.
LEADS Study by DPIIT
At a sub-national level, the Department for Promotion of Industry and Internal Trade (DPIIT) has been conducting LEADS (Logistics Ease Across Different States) study since 2018, which helps to identify and resolve logistics inefficiencies and improve trade facilitation across supply chains.
The improvement in India’s logistics ranking in the LPI report is a strong indicator of its global positioning. The government’s initiatives towards increasing logistics efficiency have been acknowledged by the World Bank. Further reforms aimed at India becoming a global manufacturing/production hub in the coming years will help decrease logistics costs and increase logistics efficiency.
