NEW DELHI: Emphasising that logistics is the backbone of economic activity which determines how fast an economy can grow, commerce and industry minister Suresh Prabhu on Friday said his ministry is putting the final touches to a policy for the logistics sector as part of a comprehensive plan to boost business and exports.
“We are now working on a policy to create new logistics hubs in India-…for immediate needs and then for future requirements. The idea is to prepare a proper integrated logistics plan,” Prabhu said at the 5th Annual Edition of The Economic Times Supply Chain Management & Logistics Summit here.
The new logistics division in the department of commerce is preparing the national integrated logistics plan in consultation with various stakeholders, including logisticsusing ministries such as fertilisers, petroleum, food, steel, mineral, mines and food processing, among others.
Logistics costs in India are pegged at 13-14% of the gross domestic product and are higher than those in developed countries, which the government aims to reduce to 10% by 2022. The World Bank Logistics Performance Index ranked India 35 in 2016, compared with 54 in 2014.
Prabhu, who is also the civil aviation minister, announced that India will soon have a policy on cargo, or the carriage of goods.
“We are preparing a policy on cargo… it will be the first time that the country will have a cargo policy. The document is in the final stages of preparation and please give your inputs so they can be incorporated,” he said.
Citing the example of Japan which benefitted from the concept of just-in-time, the minister said that a proper supply chain which is efficiently managed is required for India since the country is poised to become a $5-trillion economy. The government is already planning to put in place a common platform to ease the transportation of goods.
For this, the commerce department has initiated work on an integrated logistics portal, or logistics e-marketplace, to connect buyers with logistics service providers with all the government agencies such as customs, port community systems, sea and airport terminals, shipping lines, railways, among others.