Logistics cost will be cut to 8-9% of India's GDP by 2030

Business Tuesday 20/September/2022 04:27 AM
Logistics cost will be cut to 8-9% of India's GDP by 2030
Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Anurag Jain.

New Delhi: The government is aiming to trim India's elevated logistics costs by as much as five percentage points by 2030 from the current 13-14 per cent of gross domestic product (GDP) to 8-9 per cent of the GDP, according to Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Anurag Jain.

In an interview with ANI, Jain said that the National Logistics Policy (NLP) which was unveiled by Prime Minister Narendra Modi recently aims to achieve quick last-mile delivery, end transport-related challenges, save time and money of manufacturers and prevent wastage of agro products.

Today it is believed that our logistic cost is around 13-14 per cent of GDP, but the global standard is around 8-9 per cent. So there is chance of improvement and we are aiming it to bring it down by 5-6 percentage points by the year 2030. We are aiming to reach to the global benchmark. India is working hard on Infrastructure, he said.

"So far, 196 critical infrastructure gap projects pertaining to port connectivity and movement of coal, steel and food products have been identified, on which the Network Planning Group (NPG) is coordinating with the concerned ministries. For instance, the entire rail stretch between Amritsar to Guwahati has a 95 km single-line rail stretch. If the single rail of 95 km is converted into double trains between Gorakhpur to Valmiki Nagar, capacity will rise up to 15 rakes per day," Jain said.

Jain said that logistics costs in the country are as high as 13-14 per cent of the GDP compared to developed nations such as Singapore and the US, which have managed to cap this cost at 7-8 per cent of the GDP and leveraged it to boost exports.

Jain said the NLP aims to bring down the cost to 8-9 per cent of the GDP by 2030. Jain further said that various ministries, including telecom, railways, road transport, and food & public distribution, have started using the platform for infrastructure planning and decision making.

To give a fillip to the country's logistics sector, Prime Minister Narendra Modi on Saturday unveiled the National Logistics Policy (NLP) in what's billed as the country's first holistic approach for the $200 billion sector.

The policy, first introduced in the Budget 2020 speech by Finance Minister Nirmala Sitharaman, was unveiled by Prime Minister on his birthday. The new policy will bring in an integrated and tech-enabled approach to logistics operations to bridge the efficiency gap.

Prime Minister on Saturday said that the turnaround of container vessels at ports has been reduced from 44 hours to 26 hours. New eco-friendly waterways are being setup, 40 air cargo terminals have been set up to facilitate exports, 30 airports have cold storage facilities, and 35 multi-modal logistics facilities are being setup.