The Secretary, Department for Promotion of Industry and Internal Trade (DPIIT) announced at the CII National MNC conference on November 23, 2020, about the central government’s plan to introduce a masterplan to be implemented across the nation. The idea is to offer multi-modal connectivity between various hubs with the objective of reducing logistics cost and promoting growth in competition between the local manufacturers.
Multi-modal transportation comprises the various modes of transportation. These modes of transportation would be used for the delivery of goods.
Logistics, in general terms, is the process of management of resources, taking into account how they are acquired, stored and transported to their destination.
The masterplan would include timelines provided to various infrastructural ministries, including civil aviation, shipping and railways, in order to implement the multimodal connectivity among various production centres across India. The masterplan would be implemented in such a way as to match the international standards. All of this is planned to be brought into action by the year 2024. A department of logistics has also been created within the Ministry of Commerce and Industry to suggest policy measure to reduce logistics cost and time.
The masterplan would be placed before the cabinet for the approval. Once these approvals are in place, the specific timelines would be provided to the infrastructure ministries to execute the plan.
Developments in Logistics Sector in India In 2017, the Indian logistics sector was granted infrastructure status, which provided many benefits to the sector. It made infrastructure lending terms became more flexible with enhanced limits. It facilitated access to larger amounts of funds as external commercial borrowings (ECB). It also made longer tenor funds from insurance companies and pension funds more assessible. Logistics sector became eligible to borrow from India Infrastructure Financing Company Limited (IIFCL).
The union government undertook a series of initiatives called Multi-Modal Logistics Parks (MMLPs), in order to improve the logistics sector by cutting overall freight costs, reducing vehicular pollution and congestion, and minimising the warehousing costs.
The Department of Commerce formed a logistics division to monitor the overall development of the sector in terms of changes in the policy and modifications in the existing processes, identifying drawbacks, and implementation of technology-based interventions. The expenditures related to investments in logistics, which includes infrastructure, is expected to reach US $500 billion by the year 2025.
In addition to this, a national logistics portal is under development with the objective to serve as an e-marketplace that would be connecting buyers, logistics service providers and various government agencies.
A logistics data bank project hads been put into action, as part of the India-Japan bilateral trade relations, in order to perform real-time tracking of containers by placing radio-frequency identification (RFID) tags on the containers moving out of the ports.