Context: Recently, the Ministry of Commerce and Industry launched a report titled “Logistics Cost in India: Assessment and Long-Term Framework’.
About Report: Logistics Cost in India Assessment and Long-Term Framework
- The report is prepared by the National Council of Applied Economic Research (NCAER) with guidance of the Asian Development Bank (ADB) experts.
- Through this report, the government desires to:
- Develop a scientific logistics cost calculation framework that is inclusive and stands the test of statistical and data-based methods.
- To calculate credible logistics cost components estimates.
- Data-based planning and policymaking.
National Council of Applied Economic Research (NCAER)
- About: Established in 1956, NCAER is India’s oldest and largest independent, non-profit, economic policy research institute.
- Work areas:
- Human Development and Data Innovation
- Computable Policy Analysis
- Investor Education and Protection Fund Chair Unit
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Logistics Cost in India: Assessment and Long-Term Framework: Key Findings of Report
- Outlook: It pegs India’s logistics cost in the range of 7.8- 8.9%.
- It presents a baseline aggregated logistics cost estimate and a framework for long-term logistics cost calculation.
- Data source: It uses secondary data from,
- The Supply Use Tables
- National Account Statistics of Ministry of Statistics and Programme Implementation (MoSPI)
- The NCAER’s 2019 study, “Analysis of India’s Logistics Costs”.
- Recommendation: It recommends a hybrid approach using primary (covering all trade flows, product types, industry trends, Origin-Destination pairs, etc.) and secondary survey data, as well as real-time Big Data to provide an estimate of logistics cost.
Logistics Sector in India
- India ranks 38 in the World Bank’s Logistics Performance Index.
- The logistics sector in India was valued at US$ 250 billion in 2021, with the market predicted to increase to an astounding US$ 380 billion by 2025.
Government’s Role Towards the Development of the Logistics Sector:
- National Logistics Policy(2022): It aims to drive economic growth and business competitiveness of the country through a logistics network ie. integrated, seamless, efficient, reliable, green, sustainable and cost-effective.
- National Logistics Law: It is a unified legal framework to achieve One Nation, One Contract and support the One Nation, One Market objective The law’s provisions will make it possible to assign a distinct logistics account number.
- Logistics Master Plan: it is a plan to integrate several projects and activities to expand the mix of intermodal and/or multimodal transportation.
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News source: business standard
December 15, 2023