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PM Modi Unveils National Logistics Policy To Drive Up India's Exports

As per government's estimates, the logistics costs account for 13-14% of India's GDP, which the Centre targets to cut down to 8%.

<div class="paragraphs"><p>VRL  Logistics Ltd. transport fleet standing in a line. (Source: Company website)</p></div>
VRL Logistics Ltd. transport fleet standing in a line. (Source: Company website)

Prime Minister Narendra Modi unveiled India's National Logistics Policy on Saturday to bring down the high logistics costs in the country.

"We have to bring the 13-14% logistic costs down to single digits to become globally competitive," Modi said at the policy's launch. "It is a low-hanging fruit."

As per government's estimates, the logistics costs account for 13-14% of India's GDP, which the Centre targets to cut down to 8%. This will allow companies to reduce costs and make products that can compete in the global market.

To achieve this, the policy aims to encourage multimodal transport including roads, railways and water routes. It envisages greater efficiency by ensuring 25-30% freight movement by roads, 50-55% by railways and 20-25% via water routes.

Currently, more than 60% of the freight movement is through roads, while railways account for 25-28%, with rest of it contributed by shipping and waterways.

Modi said the timing of the launch of logistics policy is a well-thought out step as the government first laid the ground for it through several infrastructure projects executed under Bharatmala and Sagarmala along with digitisation of many government services.

Along with PM Gati Shakti National Master Plan, the policy is expected to encourage greater collaboration among ministries and departments across states and the Centre.

Highlighting the policy's thrust on digital, the Prime Minister said it comes with Unified Logistics Interface Platform, which will be a single-window platform for all transportation services, while industry associations will be be able to raise issues with government by ELogS or Ease of Logistics platform for quick resolution.

Modi said he is confident the policy will bring the $200 billion sector on par with western economies but the vision will have to be matched with performance on the ground to meet that goal.