India is all set to introduce its new logistics cost index that will provide granular data and help policymakers and investors develop projects to improve efficiency. As per the officials, the development of the logistics cost index is at the final stages, and once introduced it will help provide multiple indexed data (product-wise and region-wise) for logistics cost movement on a fortnightly as well as the monthly basis on the lines of WPI and CPI. The DPIIT also plans to get annual and all-inclusive national logistics cost data for retrieving all the cost information involved in transporting goods across the country.
Mr. Surendra Ahirwar, Joint Secretary of DPIIT explains that the artificial neural network, a global method used to understand logistics cost depends on the international data sets of consignment coming from outside India and consignment that moves within India. Hence the logistics cost is largely based on the cost of transporting in and out of trading ports in the country which is finalized by global shipping lines. The cost indexes will further bolster the estimates of logistics. He further added that they will be organizing consultation with experts from industry, government, and academics on logistics cost index to understand the internal and domestic costs. The Logistics rates in India are not organized and it is fragmented, resulting in high logistics costs of around 14-15% of GDP, compared to 7-8% in developed nations like the US and Singapore. In September, the National Logistics Policy (NLP) was launched to bring down the logistics costs and to look into logistical challenges. With NLP, India plans to bring down logistics costs to 8% in the next five years.
The PM GatiShakti National Master Plan, the objective of which is to bring down logistics costs to par with developed nations, would save ₹10 trillion annually for India.