National Logistics Policy, 2022

The National Logistics Policy (NLP) is the government's plan to make moving goods across India cheaper, faster and more reliable. While the PM Gati Shakti plan deals with building physical infrastructure, the NLP deals with the "software" of logistics: rules, processes, digital systems, skills and standards. Its aim is to bring India's logistics costs down to world-class levels so that Indian goods can compete abroad.

Why does it exist?

Logistics cost is the money spent on moving and storing goods: trucking, rail freight, warehousing, loading and unloading, paperwork and waiting time. When this cost is high, everything becomes costlier. A farmer gets less for his crop, a factory pays more for raw materials, and Indian exports become less competitive. India's logistics system has long been fragmented: many ministries, too much dependence on roads, slow paperwork and little real-time tracking.

Where did it come from?

• July 2017: A separate Logistics Division was created in the Department of Commerce to coordinate the sector. In November 2017, logistics was given infrastructure status, making long-term loans easier to get.
• 2018 onwards: The LEADS (Logistics Ease Across Different States) report began ranking states on logistics performance.
• 13 October 2021: PM Gati Shakti National Master Plan was launched for infrastructure.
• 17 September 2022: The National Logistics Policy was launched to complement Gati Shakti, along with the Comprehensive Logistics Action Plan (CLAP).

The three targets

The NLP set three main targets:

1. Reduce the cost of logistics in India to be comparable to global benchmarks by 2030.
2. Improve India's rank in the World Bank's Logistics Performance Index (LPI) to be among the top 25 countries by 2030.
3. Create a data-driven decision support system for an efficient logistics ecosystem.

How does it work? The eight action areas of CLAP

1. Integrated digital logistics systems
2. Standardisation of physical assets and benchmarking of service quality
3. Logistics human resource development and capacity building
4. State engagement
5. EXIM (export-import) logistics
6. Service improvement framework
7. Sectoral plans for efficient logistics
8. Facilitation of development of logistics parks

Key digital tools

• Unified Logistics Interface Platform (ULIP): connects the data systems of many ministries (such as railway cargo, FASTag, vehicle registration and customs) through one interface, so companies can track goods and plan better. ULIP recorded 100 crore API transactions by March 2025.
• Logistics Data Bank (LDB): tracks export-import containers; it had tracked over 75 million containers by October 2024.
• Ease of Logistics (E-LogS): a portal where industry associations can raise problems with government agencies and track their resolution.

How big is India's logistics cost?

For years, India's logistics cost was often quoted at 13% to 14% of GDP, compared with about 8% in developed economies. A study by NCAER with the Commerce Ministry (December 2023) estimated it at about 7.8% to 8.9% of GDP for 2021-22, depending on the method used. The difference shows why the third target, better data, matters: without good data, it is hard even to measure the problem.

India's position and Indian examples

• In the World Bank's LPI 2023, India ranked 38th out of 139 countries, up from 44th in 2018 and 54th in 2014.
• Many states have adopted their own State Logistics Policies in line with the NLP.
• Related projects include the two Dedicated Freight Corridors (Eastern, Ludhiana to Sonnagar, and Western, JNPT to Dadri), Multi-Modal Logistics Parks under Bharatmala, and a push to raise the railways' share of freight from about 35-36% to 45% by 2030.
• The e-way bill under GST (needed for moving goods worth over ₹50,000 by motor vehicle) and the removal of interstate check posts after GST have cut transit times.

Commonly confused concepts

• LPI vs LEADS: The LPI is a World Bank index that ranks countries. LEADS is an Indian report (Ministry of Commerce and Industry) that assesses states and union territories.
• NLP vs PM Gati Shakti: Gati Shakti plans physical infrastructure on one map; the NLP improves processes, digital systems, skills and costs. They are designed to work together.
• ULIP vs LDB: ULIP is a broad platform linking many government data systems; LDB is a specific tool for tracking export-import containers.
• Logistics cost vs transport cost: Transport cost is only freight charges. Logistics cost also includes warehousing, inventory holding, handling and administrative costs.

Issues, criticism and the way forward

• Road dependence: Most freight still moves by road, which is costlier and more polluting than rail or waterways.
• Measurement problem: Different studies give very different numbers for logistics cost, making it hard to track progress toward the 2030 target.
• Fragmented institutions: Many ministries handle different modes, and coordination is still difficult. This is why a single planning body has long been suggested.
• Skills shortage: The sector employs over 2.2 crore people, but many lack formal training.
• Way forward: More modal shift to rail and water, multimodal logistics parks, digitisation of documents, standard containers and pallets, and stronger state-level policies.

Concepts to Know

• Logistics Performance Index (LPI): A World Bank ranking of countries on how easily and reliably they move goods, based on customs, infrastructure, shipments, logistics quality, tracking and timeliness.
• API transaction: One request in which one computer system asks another for data, for example, a company's software asking ULIP for a container's location.
• EXIM: Short for export-import (international trade in goods).
• Modal shift: Moving freight from one mode of transport to another, usually from road to rail or water.
• NCAER: National Council of Applied Economic Research, a Delhi-based economic research institution.