National logistics policy was initially mentioned in 2020 by Finance Minister Nirmala Sitharaman in her address regarding the budget. The government claims that there are efforts on to implement an integrated and technologically enabled approach to logistics operations, which will be effective throughout the entire process and be useful in lowering logistics costs in the nation from the current levels of 13–14% of GDP.
The Union Cabinet headed by Prime Minister Narendra Modi approved the National Logistics Policy which seeks to cut transportation costs by promoting seamless movement of goods across the country.
An umbrella policy for the logistics sector has been in the works for around three-four years. It was felt that the logistics cost in India is high compared to other developed economies. India’s logistics cost as a proportion of the Gross Domestic Product (GDP) is believed to be around 13-14 per cent. The government now aims to bring it down to single digits as soon as possible.
The primary areas of this National logistics policy 2022 will be process re-engineering, digitization, and multi-modal transportation. It is a key decision since excessive logistical costs affect how competitive domestic products are on the global market.
The National logistics policy 2022 was deemed necessary because India has higher logistics costs than other industrialised nations. India must drastically cut its logistics costs if it wants to increase the competitiveness of its exports and domestic products.
The goal of lower logistics costs is to increase economy-wide efficiency, allowing for value addition and business. The policy lays out an extensive interdisciplinary, cross-sectoral, and multijurisdictional framework for the growth of the entire logistics ecosystem in an effort to solve concerns of high cost and inefficiency.