Logistics index being prepared for states to compete: Prabhu
As part of a plan to develop standards in various facets of the logistics sector, Union Commerce Minister Suresh Prabhu…
India’s logistics sector is witnessing a stable growth after the announcement of National Logistics Policy (NLP), industry experts said.
“As we all know, the National Logistics Policy was largely developed to help the unorganised logistics sector of India to become more organised and expand into a significant driver of economic growth,” said Zaiba Sarang, Co-founder, iThink Logistics.
She said by bringing down the logistic cost of GDP from 13–14 per cent to single digit will help India become more competitive internationally. The NLP aims at reducing costs at different parts of logistics to cut transportation costs from 6 per cent of GDP to 4 per cent, added Sarang.
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“Similarly, the warehousing costs will be brought down from 3.5 per cent of GDP to 2.5 percent. Inventory costs will be reduced from 2.5 per cent of GDP to one per cent, and order processing and administrative costs will be cut from one per cent of GDP to 0.5 per cent,” she added.
Sarang said that the reduction in logistic costs will be a major driver of growth. Micro, small, and medium-sized enterprises (MSMEs) will benefit from the reduction in logistic costs because they will have more cash flow available for other purposes, she said.
Imthiaz, CEO and Co-Founder, Raaho, said that NLP is bringing to life the multi-modal connection project whereby Bharat, and not just India, is on its way to being better connected.
Lowering of the divide between Tier-1 and Tier 2-3-4 cities, and a holistic boost to the economy when seen in conjunction with focus areas like ‘Make in India’ and ‘Production Linked Incentives’ will make a great difference, he said.
Imthiaz said that when different spokes of the wheel move together, accelerated forward movement, is inevitable – more warehousing, more digitisation, efficient freight movement, smoother handshakes between different transportation modes and lowering of cost are some of the clear drivers bringing about stable, sustainable and significant boost to the sector.
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