NATIONAL LOGISTICS LAW TO BOOST INDIAN LOGISTICS SECTOR

 The Ministry of Commerce and Industry is considering replacing the Multimodal Transportation of Goods Act, 1993 (MMTG) with a National Logistics Efficiency and Advancement Predictability and Safety Act (NLEAPS).

  • MMTG provides for the regulation of multimodal transportation of goods from India to any place outside India.
    • Multimodal transportation refers to a combination of more than one mode of movement, such as rail, road, or sea, for end-to-end delivery of goods.
  • It was introduced to facilitate the exporters and give them a sense of security in transporting their goods.

Considering Key Points

  1. Aim:
  • NLEAPS aims to streamline the logistics ecosystem in the country to promote the growth of the sector.
  • Modernize and formalize the logistics services and promote digitization in the sector, which is crucial for the smooth movement of goods.
  • To reduce the logistics cost from the present 14% of the Gross Domestic Product (GDP) to less than 10% of GDP.
  1. Reason Behind New Law:
  • The new law tends to define various participants of the logistics sector and create a light regulatory ecosystem.
    • There is no clear definition of the logistics sector in the MMTG.
  • With a market size of USD 160 billion, the logistics sector is complex, with more than 20 government agencies, 40 partnering agencies, 37 export promotion councils, 500 certifications, and 10,000 commodities.
  1. Benefit:

Effective implementation of the Act would help provide an impetus to trade, enhance export competitiveness, and improve India's ranking in the Logistics Performance Index and Ease of Doing Business.

Read More :-  https://www.pukkapartners.com/insight/national-logistics-law-to-boost-indian-logistics-sector

Introduction –

The Ministry of Commerce in India is considering bringing new policy changes in the Indian logistic sector to introduce new logistic law. The policy change is expected to address various challenges prevailing in cargo movement and different additional costs associated with importers and exporters of goods. The Ministry of Commerce published the draft of the National Logistics Policy on 5th February 2019 to seek suggestions from various stakeholders before finalizing the actual policy. A well-framed logistics law will ensure creating a user-friendly ecosystem that can be a key contributor to powerful economic growth in the country, with a potential to promote domestic and overseas trade, develop global competitiveness, generate adequate employment, and reduce economic inequality.

The Indian logistics sector is highly fragmented and unorganized despite its economic significance. According to Mr. Vikas Anand, the Managing Director, DHL Supply Chain, India, "when one looks at logistics sector in India, and breaks it into various components, and looks at transportation for example within India, it is very fragmented. 55-60% of truck drivers are the owners of the trucks. There are very few organizations, which have a large fleet. The National Logistics Policy will provide greater clarity, which will enable the companies to start investing, which will help the sector to grow.". The Indian Logistics Policy mainly focuses on improving the road network, warehousing, rail corridors, and modern cargo facilities. The policy change will ensure development in the warehousing sector by enhancing the country's storage facilities and promoting cross-regional trade on various e-commerce platforms by a smooth flow of goods. The new logistics plan has the potential to bridge the gap between producers and consumers. The draft policy released by the Commerce Ministry is aimed at reducing logistics costs from 14 percent to less than 10 percent of Gross Domestic Product by 2022. It will enhance India's industrial competitiveness and thus have a positive impact on exports.

The logistics policy will help create a point of reference for all matters relating to logistics and trade, which will also function as an information and knowledge-sharing platform. It will also help create a data and analytics center, which will ensure better transparency and continuous motoring of key logistics metrics. Efficient and practical implementation of the policy would improve India's ranking in the Logistics Performance Index and boost investments. The Logistics value chain is currently managed by various Indian ministries, such as road transport and highways, shipping, railways, civil aviation, and agencies like the Central Drug Standard Control Organization, Food Safety, and Standard Authority of India. The policy aims to bring cooperation between various ministries and have an integration on the central level. The main aim of the policy is to promote the smooth movement of goods across the country. 

The recent outbreak of Covid-19 crippled the logistics sector's growth and led to the accumulation of huge losses. Both demand and supply got affected due to the lockdown; the factories were shut, and the sudden migration of workers during the lockdown created a scarcity of skilled laborers. During this hard time, an effective policy change can be a key contributor to the country's economic development, with the potential to facilitate domestic and foreign trade, promote global competitiveness, enhance incomes, support the 'make in India' initiative and reduce economic disparities across various geographies.

The Key Focus Points in Indian Logistic Policy are:

  1. The integration of the 'Make in India' initiative with the national logistics policy will ensure nationalism and domestic production. It will help in cost reduction and increased exports in the long run.
  2. Initially, the policy must ensure the balance between imports and exports of materials; the country must relay importing only necessary cost-efficient materials and focus more on enhancing domestic capacities.
  3. The government's growing focus on infrastructure development under the Make in India initiative will further ensure growth for the logistics sector.  
  4. The policy focuses on public-private partnerships; thus, cooperation will ensure better management.
  5. The policy also considers various contingencies such as changing economic, social, and political environments.
  6. The new policy will make India technologically ready to support the policy's objectives on the technical front.
  7. The policy must ensure focus on key areas such as cybersecurity, data localization, and various sophisticated technological concepts such as artificial intelligence, blockchain, big data, and many more. 
  8. The government is focused on creating various digital platforms and mobile applications for logistics such as warehouse information tracking and trading yard (WITTY) to map the warehouse.

The current state of the industry has been impacting the competitiveness of domestic goods in the international market. The government aims to reduce the logistics cost, which is 14% of the Gross Domestic Product (GDP) at the moment, to less than 10%. This will be expected to create opportunities for the players in the Indian logistics sector.

 

Email / Call Us at :
 engage@pukkapartners.com
 APAC: +91 70226 21355
 United States: +1 858 939 9252
 

Comments

Post a Comment

Popular posts from this blog

VIRTUAL ASSISTANTS FOR IMPROVING CUSTOMER EXPERIENCE IN TELECOM INDUSTRY

 If you consider the customer satisfaction index, the telecom industry is probably one of the worst ranking industries. But that was only until 2019. By the end of 2020, together, the sector made sure to climb up the satisfaction rate. And guess what? They will be able to do that. However, it’s just the beginning.  The importance of customer experience is growing like never before. And one tool that’s helping telecom industries is the use of virtual assistants. Did you know that OTT platforms are eroding the revenues of telecom industries? With video-on-demand media, the consumers are trying to cut the cord even more eager than ever before.  However, things are changing. How? Let’s find out! Virtual Assistants Aiding in Better CX in Telecom: Decoding the Ways If the telecom industry upgrades its digital customer engagement scale, it can easily experience the upsides in terms of better engagement, services, resulting in boosting sales. However, telecom operators often don’t have the peo
Read more

E-HEALTH: THE BOOM IN DIGITAL HEALTH TO DUISRUPT LIFE SCIENCES AND MEDICAL COMMUNITY

  E-Health is an developing field in the intersection of public health, medical informatics, and business, mentioning to health services and data delivered or enhanced through the Internet and connected technologies. In the broader sense, the term characterizes a technical development and a state of mind, a way of thinking, an attitude, and a commitment for networked, global review, to recover health care locally, regionally, and globally by using information and communication technology. The 5 e's in "E-Health" Efficiency  - one of the promises of e-health is to increase efficiency in health care, thereby decreasing costs. One possible way of reducing costs would be by avoiding duplicative or unnecessary diagnostic or therapeutic interventions through enhanced communication possibilities between health care establishments and patient involvement. Enhancing quality  of care - increasing efficiency involves not only reducing costs but at the same time improving quality. E-
Read more

HYDROGEN STORAGE - A DISRUPTIVE TECHNOLOGY INNOVATION

  Excessive expectations have been met with disappointment in the past with hydrogen technologies. Nonetheless, a rising body of research suggests that these technologies are a viable choice for deep decarbonization of global energy systems, with recent cost and performance advances pointing to economic viability. The cost of producing, transporting, and storing hydrogen has decreased dramatically. This is complemented by an increase in clean technology regulations. As a result, we predict that hydrogen technology will gain traction, particularly in the transportation and alternative energy generation sectors. The transition to a sustainable energy economy needs an energy carrier capable of large-scale carbon-free energy transfers. Hydrogen is a sustainable energy carrier with the potential to benefit the whole energy sector. However, storing significant amounts of hydrogen is difficult. There are numerous obstacles to overcome in order to achieve a cost-effective hydrogen cycle. Hydro
Read more