Context: The Union Minister of Commerce & Industry delivered a speech at the First National Conference of States on Logistics.

• The Department of Commerce organized the National Conference on Logistics to initiate a consultative and collaborative framework for the Central and State Governments to work in a coordinated manner in the logistic sector.  

Key highlights

• The National Logistics Policy, which is being negotiated with the National Logistics Council and the State Logistics Coordination Committee, will serve as a template to better coordinate and integrate logistics centers.
• Logistics consists of 5R’s: Get the Right products-under the Right conditions-At the Right place-At the Right time-to the Right customers.
• A comprehensive 18 Point Agenda was presented to the States to improve logistics.
• Areas for logistics improvements in the States were identified as city logistics, simplification of approvals for warehouses, facilitation for warehousing development, reducing the burden on truck movement and addressing the shortage of truck drivers. 
• The Ministry of Commerce & Industry will work with the Ministry of Housing and Urban Affairs to focus on 50 cities for logistics planning initially. 
• The Logistics Division of the Ministry of Commerce & Industry will embark on things on the survey to assess and rank States on logistics performance. 
• The State ranking will focus on data in addition to perspective on logistics performance. 
• Strengthening the logistic ecosystem was emphasized and efforts will be made for reducing the logistics costs from the present 13% to 8%.
• It will help Indian trade become competitive, create jobs, improve India’s ranking and make it a logistics hub for the global supply chain.

About the Indian logistics sector

• India’s logistics sector is highly defragmented and the government aims to reduce the logistics cost from the present 14% of GDP (Gross Domestic Product) to less than 10% by 2022.
• The logistics sector, with market size of $160 billion, is very complex, involving more than 20 government agencies, 37 export promotion councils, 500 certifications and 10,000 commodities.
• India’s rank has gone up from 54 in 2014 to 44 in 2018 in the World Bank’s Logistics Performance Index (LPI), in terms of overall logistics performance.

Importance of logistic sector: The Indian logistics sector provides livelihood to more than 22 million people

• The progress of the logistics sector holds an immense value for the Indian economy as such advancement would increase exports, generate employment and give the country a significant place in the global supply chain.

Challenges: Immediate problems include high cost, underdeveloped material handling infrastructure, fragmented warehousing, lack of seamless movement of goods and poor integration with modern information technology.

• Procedural complexities, redundant documentation and involvement of multiple regulatory and policy-making entities.

Initiatives Taken by Government
New Logistics Division

• A new Logistics Division has been set up in the Department of Commerce to coordinate integrated development of the sector by way of policy changes, improvement in existing procedures, identification of bottlenecks and gaps, the introduction of technology-based interventions.

Multi-Modal Logistics Parks Policy (MMLPs)

• The MMLPs are a key policy initiative of the Government of India to improve the country’s logistics sector. 
• This initiative will lower freight costs, reduce vehicular pollution and congestion ,cut warehouse costs to promote domestic and global trade.

Logistics Portal

• A National Logistics Portal is being developed in phases to serve as a transactional e-marketplace by connecting buyers, logistics service providers and relevant government agencies.
• This portal will be the single window marketplace to link all stakeholders.

Logistics Data Bank

• As a part of the India-Japan bilateral cooperation, a Logistics Data Bank Project has been commissioned to track containers on a ‘near-real-time’ basis.
• The project has already expanded to various ports in India and covers almost 90% of the total container volumes in India.

National Logistics Policy

• The government is working on a ‘National Logistics Policy’, which aims to promote seamless movement of goods across the country.
• Also Read: https://abhipedia.abhimanu.com/Article/IAS/MTg2NTQ3/Govt-plans-to-replace-multi-modal-transportation-act-with-national-logistics-law-Geography-IAS