DPIIT signs MoU with NCAER for developing detailed framework for assessment of logistics cost in India
The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry and National Council of Applied Economic Research (NCAER) signed a Memorandum of Understanding (MoU) in New Delhi last week for the development of Framework & Assessment of Logistics Cost in India. The MoU was signed by Secretary and Operations Director, NCAER, Dr Anil Sharma and Joint Secretary, DPIIT, Dr S. K. Ahirwar; the occasion was also graced by Secretary, DPIIT, Mr Rajesh Kumar Singh.
The key deliverables of the MoU are: i) Developing a detailed framework for assessment of Logistics Cost in the country; ii) Make a comprehensive study for assessment of logistics cost for the year 2023-24; iii) Assessment of differentials in logistics costs across routes, modes, products, types of cargo, and service operations, etc.; iv) Identification of major determinants along with influence on the logistics in different sectors, etc.
Mr Rajesh Kumar Singh spoke about the importance of data-based evaluation of logistics cost. A panel discussion on this subject was held with participation from senior government officers from DPIIT and GSTN, multilateral institutes, industries, academicians, etc.
Stakeholder suggestions
During the open discussion with logistics sector stakeholders and industry associations, the response was very encouraging and it was suggested that the logistics sector being very diverse in nature, commodities/products of high value and high volume be identified for this study. There were also suggestions to look into the intangible and indirect elements of logistics cost, which also includes the cost of delay. There was also a view that from an investor perspective, the convenience of establishing business may be considered as an element affecting the cost.
The MoU envisages NCAER to conduct the detailed study and submit the report within a year. The study is likely to have a far-reaching impact on the logistics sector in India, emphasised a Ministry of Commerce and Industry release.
NLP aims
The Government of India had launched the National Logistics Policy (NLP) in September 2022. One of the primary objectives of the NLP was to reduce the percentage of logistics cost to the GDP. In line with this, the Logistics Division, DPIIT had launched a report titled ‘Logistics Cost in India:
Assessment and long-term framework’ in December 2023, prepared by NCAER, where a baseline aggregated logistics cost estimate and a framework for long-term logistics cost calculation was prepared.
Logistics cost in India needs to be regularly assessed and monitored such that the data of cost variation will both benefit the industry and the policymakers. This process involves using data of trade flows, product types, industry trends and origin data pairs. In addition to conducting detailed secondary surveys, this requires an institutionalised framework for the process of data collection in a systematic and periodic manner, the release added.
Source: Exim News Service: New Delhi, July 7