National Policy in Logistics

National Policy in Logistics Sector 2024 | India and Slovenia

Nationalism is a belief system that emphasises the importance of our membership in a nation, valuing its origins, nature, and value. It views us as social animals, sharing languages, memories, and a sense of togetherness. Nationalism views the nation as the central form of community, valuing supreme loyalty. It can be divided into aims like national autonomy, identity, and unity.

National policies are statements containing principles and broad courses of action adopted by national governments, addressing specific objectives in areas like health, education, security, and the environment. They play a crucial role in shaping a nation's future, ensuring sustainable development, and addressing pressing challenges, such as India's National Health Policy, National Education Policy, and National Cyber Security Policy.

The concept of the nation-state has led to the creation of uniform national cultures through state policies. Examples include compulsory primary education systems that popularise a common language and historical narratives.

These policies contribute to shaping a shared national identity and fostering a sense of unity within a nation.

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Role of Government Policies and Initiatives in the Indian Logistics Sector

Government policies significantly influence the Indian logistics sector, crucial for trade, commerce, and economic development, with key areas where these policies have significantly impacted.

Infrastructure Development: The government has implemented initiatives like the Bharatmala and Sagarmala Project to enhance road and port connectivity, improve freight movement efficiency, and lower transportation costs.

Tax Reforms:  The 2017 GST introduced in India significantly impacted the logistics industry, enabling faster freight movement, reducing turnaround times, and resulting in substantial cost savings for logistics firms.

Growth of E-commerce and Digitisation:  The government is promoting digitalisation through initiatives like the Digital India campaign, focusing on online logistics platforms for improved tracking, transparency, and efficiency in last-mile delivery.

Skill Development and Training: The government has implemented policies focusing on skill development and training to address labour shortages and enhance workforce quality in the sector.

The National Logistic Policy and infrastructure development initiatives like the Gati Shakti programme are expected to enhance India's global competitiveness in the logistics and supply chain sector, underscoring the crucial role of government policies in driving its growth and development. 

Indian Government Support for Small and Medium Enterprises 

The Indian government recognises the vital role played by small and medium enterprises (SMEs) in the country's economic growth. In the logistics sector, several initiatives and policies have been implemented to support SMEs. Here are some ways the Indian government provides support:

National Logistics Policy (NLP):  The government has introduced the National Logistics Policy, aiming to establish a reliable, cost-effective, and technologically advanced logistics ecosystem aiming to decrease logistics costs from 14-18% of GDP to 8% by 2030.

Financial Support and Relief Packages: The government has introduced economic relief packages for SMEs during challenging times like the pandemic, such as a relief package for Rs. 20 crore (US$ 2.66 million) in May 2020.

Technology Adoption: The government is promoting the adoption of tech-based solutions by SMEs in the logistics sector to improve efficiency, reduce costs, and maintain market competitiveness.

Skill Development and Training: The government is investing in skill development programs to improve the capabilities of SMEs, focusing on areas like supply chain management, digital literacy, and modern logistics practices.

Access to Finance: The government offers various credit and finance schemes and loan programs to assist SMEs in meeting their working capital needs, investing in infrastructure, and expanding their operations.

Export Promotion: SMEs in the logistics sector are facilitated by export-oriented policies, trade facilitation, and incentives to engage in global trade.

Infrastructure Development: The government is prioritising infrastructure development, such as roads, ports, and railways, to improve connectivity and reduce transportation costs in the logistics sector.

Ease of Doing Business: The government is prioritising enhancing the business environment for SMEs through simplified regulations, reduced paperwork, and efficient licensing processes.

In summary, the Indian government's multifaceted approach includes policy formulation, financial assistance, technology adoption, skill development, and infrastructure enhancement to support SMEs in the logistics sector. These efforts contribute to the growth and sustainability of small and medium enterprises across the country.

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Indian Government Initiatives and Programs

Growing government initiatives and programs like Bharatmala Pariyojana and the Sagarmala projects are driving industry demand. Note the various aspects:

  • The government is implementing changes to road freight transport regulations, including restricting trucks over 15 years, transitioning to GST, and implementing digital transactions like e-way bills and Fastags. These changes have negatively impacted small fleet operators, as they aim to phase out older and polluting vehicles and increase load capacity.
  • Small fleet owners dominate the Indian road freight industry, accounting for 70% of all fleets. They operate at a margin of 8-12% and have an average of 12-15 transaction days per month. The market experienced an average CAGR during 2014-19 due to government regulations, road construction, and the revision of BF VI norms.
  • The Bharatmala Pariyojana and Sagarmala projects, Eastern and Western Dedicated Freight Corridors, and public-private partnership ports have boosted market growth. Freight rates are typically high during the festive season, with WAFC at USD 0.036/tonnes/km in 2019.

The Logistics Performance Index (LPI) by the World Bank is a prominent global logistics-related indices that ranks countries based on their trade logistics performance. It serves as an interactive benchmarking tool to identify challenges and opportunities for improvement.

The LPI ranks countries on six dimensions of trade:

  • Efficacy of the clearance process by border control agencies, including customs.
  • Quality of trade and transport-related infrastructure.
  • Ease of arranging competitively priced international shipments.
  • Efficiency and quality of logistics services.
  • Ability to track and trace consignments.
  • Timely transhipments are needed to reach the destinations for delivery.

The LPI 2023 allowed for comparisons across 139 countries. It provided valuable insights into a country's logistics performance, helping businesses, policymakers, and other stakeholders make informed decisions.

Rank (2023): India - 38; Slovenia - 43

Score (2023): India - 3.4; Slovenia - 3.3

In addition to the Logistics Performance Index (LPI) by the World Bank, there are other indices that provide insights into the logistics performance of countries worldwide:

Agility Emerging Markets Logistics Index: The index ranks 50 emerging markets countries based on factors that make them attractive to logistics providers, freight forwarders, shipping lines, air cargo carriers, and distributors.

Global Competitiveness Index by the World Economic Forum: The index evaluates infrastructure quality, including roads, railroads, ports, air transport, electricity availability, and quality supply, in addition to a logistics pillar.

Doing Business Report by the World Bank: The report evaluates the ease of business, including cross-border trading, by evaluating the time and cost (excluding tariffs) involved in exporting and importing goods.

Global Enabling Trade Report by the World Economic Forum: The report assesses the efficacy of existing institutions, policies, infrastructures, and services in economies that facilitate the free movement of goods across borders and their destinations.

These indices offer crucial data on a country's logistics performance, aiding businesses, policymakers, and other stakeholders in making informed decisions.

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Agility Emerging Markets Logistics Index

In the 2022 Agility Emerging Markets Logistics Index, India was ranked second (China was 1st) with an index score of 7.21. This ranking reflects India's strong performance in both domestic and international logistics. However, in terms of digital readiness, India fell from the top spot a year ago to No. 5. These rankings indicate India's significant role in the global logistics market and its potential for further growth and development.

Investment Potential in the Indian and Slovenia Logistics Sector 

Investing in India's logistics sector can be a lucrative opportunity. Here are some ways to explore investment options:

Indian Logistics Infrastructure Projects  

India's logistics infrastructure sector, valued at USD 215 billion in 2021, is expected to grow at a CAGR of 10.7% between 2021 and 2026, with the National Logistics Policy aiming to align India's logistics costs with global benchmarks by 2030.

The Indian logistics market offers 112 opportunities worth USD 5.97 billion, with investments in common infrastructure projects worth USD 157.09 million, ICD/CCF/Warehouse projects worth USD 25.75 million, and exploring additional opportunities worth USD 4.15 million.

Investment Promotion in Slovenia

Slovenia, strategically located at the crossroads of Pan-European corridors, is a vital transportation hub between the Adriatic Sea and the Balkans. The Port of Koper offers advanced infrastructure and is the fastest route for goods between Asia and Central Europe. The government has allocated EUR 17 billion for logistics and transportation improvements.

Slovenia is promoting digitalisation in transport and logistics to reduce costs and streamline processes, suggesting investors should consider companies like BTC, Intereuropa, and Luka Koper.

Investing in logistics can shape a seamless future for movement and trade. Whether in India or Slovenia, strategic investments can yield substantial returns! 

Slovenia's Trade Policies

Slovenia places significant emphasis on international economic cooperation, especially since exports contribute to more than 80% of its GDP. Here are some key aspects of Slovenia's trade policies:

International Economic Cooperation: Slovenia supports international companies, promotes an active trade policy, and values economic diplomacy. It encourages economic cooperation, attracting foreign direct investment and active participation in international organisations.

Internationalisation: Slovenian companies' internationalisation boosts their value and competitiveness through exports, imports, and global value chains. Services are provided to existing and potential exporters, facilitating cross-border operations and geographical diversification, aiming to improve foreign market conditions.

Economic Diplomacy: Slovenian embassies and consulates safeguard and promote Slovenian companies abroad, organising business delegations and highlighting Slovenia as a promising investment opportunity.

Trade Agreements: Slovenia, a WTO member since 1995, has bilateral agreements with the United States covering investment incentives, civil aviation, and international financial institutions.

Remember, staying informed about trade policies and agreements is crucial for businesses operating in a globalised environment. 

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The National Logistics Policy (NLP), unveiled by the Government of India in September 2022, serves as a strategic framework for the logistics sector.

The NLP aims to streamline regulations, reduce logistics costs, and benchmark services in the sector, complementing the PM GatiShakti National Master Plan's focus on enhancing connectivity and infrastructure. The National Logistics Plan (NLP) aims to reduce logistics costs by 50% by 2030, aiming to place India among the top 10 on the Logistics Performance Index and standardise global costs.

The NLP focuses on strategic pillars such as supply chain optimisation, digital systems, and unified logistics interfaces, emphasising domestic movements, import/export logistics, warehousing, procurement, technology, and supply chain design. The NLP introduces the Unified Logistics Interface Platform (ULIP), a digital system offering real-time tracking, seamless data exchange, and improved efficiency, benefiting businesses by enhancing transparency, reducing paperwork, and optimising logistics processes.

India and Slovenia differ in their approach to NLP, with India focusing on domestic and international logistics and Slovenia utilising its established logistics networks and strong ties with neighbouring countries. Both countries can learn from each other's experiences and adapt policies accordingly. The NLP represents a significant step toward transforming India's logistics sector. By embracing digitalisation, improving infrastructure, and fostering collaboration, India can unlock its logistics potential. As India and Slovenia continue their respective journeys, sharing best practices and collaborating on cross-border logistics could yield mutual benefits.

Usha Menon

With over 25 years of experience as an architect, urban designer, and green building consultant, Usha has been designing sustainable, and visionary spaces. She has published a book, has been actively blogging, and is on social media. Now, her journey is transitioning to full-time writing. Her words will continue to craft stories, not brick and mortar, but in the realm of ideas, fostering a better, more inspired world.


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