The Department of Commerce’s Logistics division has drafted a National Logistics Policy, 2018 (pdf), and will also create an ‘IT backbone’ to develop the National Logistics Information Portal which will serve as an online marketplace for logistics service providers, buyers, government agencies (customs, railways, ports, waterways, coastal shipping etc) etc.
Stakeholders and the general public can send comments and suggestions on this draft to email@example.com or in the comment box under the ‘Discussion’ section of MyGov portal by 19 February 2019, preferably in word format.
Below, we highlight how this policy relates to the Indian digital ecosystem:
The draft policy starts out by saying that, “An efficient and reliable logistics network coupled with a transparent and consistent cross border trade facilitation process is a key driver of export competitiveness in the country…. An efficient logistics ecosystem will also encourage investments in the country, especially FDI and will in turn positively impact international trade.” (emphasis added)
Digital highlights from the draft policy
- Startup acceleration fund by the Logistics Wing: This fund will incubate startups in the logistics sector, enable the adoption of newer technologies and promote innovative practices “that can help in reducing costs and turnaround times.”
- The policy also states that it will focus on perishable commodities because of the specialised nature of requirements for their packaging, transport and storage. It will also encourage startups working in the “farm to plate” space.
- “Identify, implement and monitor technology based interventions such as e-tolling, electronic document flow, rationalization of checkpoints, digital verification at all checkpoints etc., to decrease wait time, in effect improving the average speed across key corridors.”
National Logistics e-marketplace
In August 2018, the Ministry of Commerce said that it was developing an online National Logistics Portal to reduce the cost of moving goods and services across the country and the world from 14% (of India’s GDP) to 10%. The portal was first announced in February 2018.
The current draft states that the e-marketplace will be a one stop marketplace for the simplification of documentation for exports/imports and drive transparency through digitization of processes involving Customs, PGAs etc in regulatory, certification and compliance services.
- “This will bring in greater transparency and faster clearances, thereby reducing logistics costs and making exports competitive, thus improving trade and bolstering economic growth.
- The portal will also enable improved price discovery, route optimization, in-transit tracking, and timely delivery assurance and… The proposed portal shall be developed keeping in view the advancements in technologies like blockchain, internet of things etc.”
According to the policy, the e-marketplace will be a “key enabler” for MSMEs in India, by providing them with
- “a single window for all EXIM certifications, while also giving access to a host of logistics services at competitive rates.”
- “Ease the MSME business through a transparent price discovery mechanism and will also remove information asymmetry on overall capacity availability of logistics infrastructure.”
- Better access for MSMEs to markets
Data analytics center
- Creating a data and analytics center for transparency and continuous monitoring of key logistics metrics, enable data driven decision-making for future infrastructure projects.
- “Performance dashboards will be defined for key logistics metrics across various Central Ministries as well as for respective State Governments.”
- Data sources like telematics, remote sensing and track and trace data will be incorporated.
- The data from the hub will be used to facilitate review of logistics performance metrics, on a quarterly basis by an inter-ministerial committee, chaired by the Minister for Commerce and Industry. On a half yearly basis, a review will be conducted by the National Council for Logistics, chaired by the Prime Minister.
On E-commerce logistics, the draft states that it would like to promote “cross regional trade on e-commerce platforms by enabling a seamless flow of goods.” The Department of Posts will be “leveraged in formulating seamless first and last mile connectivity” for ecommerce companies within India, to ensure seamless flow of goods. It also states that this will:
- Reduce transportation and inventory holding costs
- Increase efficiencies in warehousing, encourage set-up of multi modal logistics hubs
- Strengthen the air cargo infrastructure, storage infrastructure for railways and improve technology readiness of the Department of Posts
- Creating a single point of reference for all logistics and trade facilitation matters in the country which will also function as a knowledge and information sharing platform
- Optimizing the current modal mix (road-60%, rail-31%, water-9%) in line with international benchmarks (25-30% share of road, 50-55% share of railways, 20-25% share of waterways) and promote development of multimodal infrastructure
- Improving first mile and last mile connectivity to expand market access of farmers, MSMEs and small businesses
- Enhancing efficiency across the logistics value chain through increased digitization and technology adoption
- Supporting the development of the warehousing sector