India’s economic growth trajectory is inextricably linked to its logistics sector, a crucial engine that powers the nation's trade, commerce, and industry. As the country celebrates National Logistics Day, it is imperative to understand the significance of a robust logistics policy in fostering economic prosperity and global competitiveness.
Acknowledging Progress and Paving the Future
Ketan Kulkarni, Chief Growth Officer at Allcargo Group, emphasises the critical role of logistics in economic development: “National Logistics Day acknowledges the role of the logistics sector in facilitating India’s economic development through efficient transportation of goods across the country and beyond borders. The policymakers have shown a continued focus on transforming the logistics industry through infrastructure and technology-led reforms.”
Kulkarni highlights the transformative potential of the National Logistics Policy (NLP), introduced in 2022, which aims to create an integrated logistics ecosystem and efficient multimodal logistics infrastructure. “As a result, India has climbed from the 44th to the 38th position out of 139 nations in 2023. To unlock the potential, the sector requires sustained policy support and increased capex in transport as well as digital infrastructure development,” he adds.
Economic Impact and Strategic Importance
Anil G Verma, Executive Director & CEO of Godrej & Boyce, notes the direct impact of logistics on the economy: “Logistics play a crucial role in the progress of any country and have a direct impact on the Gross Value Added in the economy. The National Logistics Policy complements the PM GatiShakti National Master Plan by addressing the soft infrastructure and logistics sector development.”
Verma underscores the policy's role in streamlining the fragmented logistics sector, reducing costs, and enhancing efficiency. This is pivotal as India aims to become a USD 7 trillion economy by 2030. “In today's hyper-charged digital age, logistics has become the lifeblood of the digital economy,” he asserts.
Driving Ecommerce and Technological Integration
The rapid growth of India’s e-commerce sector, projected to reach USD 120 billion by 2026, hinges on an efficient logistics network. Lancy Barboza, MD of Flomic Global Logistics, points out, “India needs a national logistics policy to streamline the USD 215 billion sector, reducing costs from 13-14 per cent to 8-10 per cent of GDP. Efficient logistics are vital for the USD 38 billion e-commerce sector.”
Zaiba Sarang, Co-founder of iThink Logistics, highlights the sector's pivotal role: “Logistics has truly become the backbone of the booming e-commerce sector, driving growth and enabling businesses to thrive. In an ever-evolving industry, our focus on cutting-edge technology and customer-centric solutions empowers businesses to navigate challenges with ease.”
Enhancing Global Trade Competitiveness
The NLP is not only about domestic improvements but also about enhancing India's position in global trade. Nitin Navneet Tatiwala, VP of Marketing and Airline Networks, MEISA, mentions, “On National Logistics Day, we celebrate India’s logistics sector for its role in driving economic growth and enhancing global trade competitiveness.”
Tatiwala highlights the importance of infrastructure development in key economic zones, streamlined operations through initiatives like the PM Gati Shakti Plan, and technological advancements such as AI and real-time data analytics. “These advancements ensure seamless deliveries, support SME integration into global supply chains, and enhance trade by optimising routes, reducing fuel consumption, and boosting customer satisfaction,” he explains.
Reducing Costs and Improving Efficiency
A significant challenge India faces is the high logistics cost, currently around 14 per cent of GDP, compared to the global average of 8 per cent. Akash Agrawal, Co-Founder of Zoff Foods, stresses, “A well-defined National Logistics Policy can address these challenges by reducing logistics costs to improve businesses’ profit margins and boost overall economic growth.”
Agrawal also points out the backbone role of logistics in the e-commerce sector: “Efficient logistics ensures timely and reliable product delivery to consumers, the cornerstone of e-commerce success. Streamlined logistics enable brands to manage inventory efficiently, reducing storage costs and the risk of stockouts.”
Building a Resilient Future
The vision of the National Logistics Policy is to build a seamless, efficient, and eco-friendly logistics network. Edwin L, Co-founder of Boxigo.in, notes, “The NLP aims to reduce logistics costs from 13-14 per cent of GDP to match the global average of 8 per cent by 2030. This reduction is vital for enhancing the competitiveness of Indian products both domestically and internationally.”
India’s logistics sector is poised for unprecedented growth and innovation, driven by a robust policy framework and sustained investments in infrastructure and technology. As the nation moves towards its goal of becoming a USD 5 trillion economy, a strong logistics policy will be the linchpin that ensures this vision becomes a reality, powering India’s economic engine and enhancing its global standing.
On this National Logistics Day, we celebrate the unsung heroes of the logistics sector who ensure that goods move seamlessly across the country and beyond. Their efforts not only support businesses but also drive economic growth and prosperity. As India continues to evolve as a global economic powerhouse, a strong logistics policy will be the backbone that sustains this growth and paves the way for a bright and prosperous future.
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