DPIIT and NCAER sign MoU to overhaul India's logistics cost

New Delhi [India], July 5 : The Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce & Industry, joined hands with the National Council of Applied Economic Research (NCAER) to develop a comprehensive framework for the assessment of logistics costs across the country.
According to a press release by the Ministry of Commerce and Industry, the Memorandum of Understanding (MoU), signed in New Delhi on Friday, outlines a collaborative effort to delve deep into the intricacies of logistics expenses and their impact on India's economic framework.
The Memorandum of Understanding (MoU) was signed by Dr Anil Sharma, Secretary and Operations Director at NCAER, and Dr SK Ahirwar, Joint Secretary at DPIIT, in the presence of Rajesh Kumar Singh, Secretary at DPIIT.
The primary goals of the MoU- developing a comprehensive framework for the assessment of logistics costs within the country, conducting an in-depth study to evaluate logistics costs for the year 2023-24, analyzing logistics cost variations across different routes, modes, products, cargo types, and service operations, and identifying key factors that influence logistics across various sectors, read the press release.
Rajesh Kumar Singh highlighted the critical role of data-driven evaluations in understanding and managing logistics costs.
The seminar included a panel discussion with senior government officials from DPIIT and GSTN, as well as representatives from multilateral institutions, industries, and academia.
During an open forum with logistics stakeholders and industry associations, there was a positive response and suggestions for focusing on high-value and high-volume commodities for the study.
Additionally, it was recommended to consider intangible and indirect logistics costs, including delays, and the impact of business establishment convenience from an investor's perspective, read the press release.
The MoU assigns NCAER the task of conducting this detailed study, with a report expected within a year. This initiative is anticipated to have significant implications for India's logistics sector.
The National Logistics Policy (NLP), launched by the Government of India on September 17, 2022, aims to reduce logistics costs as a percentage of GDP.
In line with this objective, the Logistics Division of DPIIT released a report titled "Logistics Cost in India: Assessment and Long-Term Framework" in December 2023, prepared by NCAER.
The report provided a baseline estimate of aggregated logistics costs and established a framework for long-term cost calculations.
Regular assessment and monitoring of logistics costs are essential to provide valuable insights for both industry and policymakers, read the press release.
This process involves analyzing data related to trade flows, product types, industry trends, and origin-destination pairs.
Alongside conducting detailed secondary surveys, an institutionalized framework is required to collect data systematically and periodically.