Logistics Sector


  • The Indian logistics sector is currently valued at $160 Bn, the sector is expected to become worth $215 Bn in the next two years.
  • 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.
  • The Indian logistics sector employs more than 22mn people.

How the grant of ‘infrastructure sector’ assist the logistics sector:

  • The Logistics Sector was granted infrastructure status in 2017.
  • The infrastructure status permits the Logistics Sector to avail the following benefits:
  • Infrastructure lending at easier terms with enhanced limits.
  • Access to larger amounts of funds as External Commercial Borrowings (ECB).
  • Access to longer tenor funds from insurance companies and pension funds.
  • Eligibility to borrow from India Infrastructure Financing Company Limited (IIFCL).

Initiaves taken by the government to improve the business environment:

  • 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, and introduction of technology-based interventions.
  • Expenditure on investment in logistics, including infrastructure, will touch $500 Bn, annually, by 2025.
  • 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 and 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 market place 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. RFID tags are placed on every container coming out of the ports to tracks the container’s movement. The project has already expanded to various ports in India and covers almost 90% of the total container volumes in India.

Source: https://www.makeinindia.com/article/-/v/logistics-sect-1

Practice Question: What initiatives have been taken by the government to improve the business environment with respect to the ‘logistics sector’ in India? – 150 words

Categories: POINT IAS

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