Com Min proposes separate fund, PM-headed national council as part of draft logistics policy

The commerce ministry has proposed several measures such as setting up of a separate fund, single-window e-marketplace and a law to define the role of various stakeholders, as part of the draft national logistics policy released Wednesday.

The policy aimed at integrating and optimising various elements of logistics value chain, to ensure seamless, multi modal growth of an efficient logistics sector in the country.

The ministry has sought views of stakeholders by February 19.

Its objectives include providing an impetus to trade, enhancing export competitiveness, improving India's ranking in the Logistics Performance Index to between 25 and 30, reducing losses due to agri-wastage to less than 5 per cent, driving logistics cost to 10 per cent of GDP from the current levels of 13-14 per cent.

The other thrust areas of the policy include focusing on critical projects to enable first mile and last mile connectivity; proper development of multi-modal logistics parks (MMLP); interventions to reduce logistics cost and promote efficiency for movement of key commodities; and setting up a Logistics Data and Analytics Center.

Besides, it includes creating a Center of Trade Facilitation and Logistics excellence; promoting cross regional trade on e-commerce platforms through seamless flow of goods; promoting green logistics; and setting up a start-up acceleration fund.

It said a non-lapsable logistics fund will be created, to drive progress against the key thrust areas.

The fund can be deployed for providing viability gap funding for select MMLP projects, first and last mile projects and projects for poorly-serviced remote areas; incentivising select logistics skilling programmes; and setting up a start-up acceleration fund to incentivise development of new technology.

Talking about the law, it said a framework act on integrated logistics will be enacted to define the role and responsibilities of all stakeholders in the multimodal logistics space.

"This will institutionalise the defined roles of the relevant stakeholders as per the national logistics policy," it added.

Further, the draft has suggested constitution of four committees or councils including the National Council for Logistics, chaired by the prime minister; an apex inter-ministerial committee, chaired by the Minister of Commerce and Industry; an India Logistics Forum chaired by the commerce secretary; and an empowered task force.

This is required as the logistics wing under the ministry would be requiring extensive coordination, data gathering and monitoring across central ministries including roads, railways, shipping, civil aviation, food processing finance and home affairs, it said.

"The council (chaired by the prime minister) will provide overall direction and guidance for the integrated development of logistics in the country. Further, it will review the progress made against the Integrated National Logistics Action Plan every six months.," it added.

It added that creation of a national logistics e-marketplace as a one-stop marketplace will involve simplification of documentation for exports/imports and digitisation of processes.

"An effective and efficient logistics ecosystem can be a key contributor to robust economic growth in the country, with the potential to facilitate domestic and foreign trade, promote global competitiveness, enhance incomes, and drive the Make in India initiative," it added.

High logistics cost in India impacts both external and internal trade. The cost in India is estimated at 13-14 per cent of gross domestic product, compare with 9-10 per cent in the US and Europe and 11 per cent in Japan.

There is no single unit which manages the sector, as it is currently being managed by many ministries including road transport, shipping, railways, civil aviation, posts and commerce and industry, and finance.