In an attempt to help investors & policymakers in making improved and efficient decisions, India soon would be having its own logistics cost index to provide spot-on data.
As per the officials in the Department for Promotion of Industry and Internal Trade (DPIIT), a framework to make the same possible is in its final stages and would be released pretty soon.
The initiative would capture multiple data indexes in terms of products, regions, etc. on the lines of WPI and CPI. Additionally, an annual, all-encompassing, national logistics cost data based on Indian systems will also be brought out by DPIIT to provide a truer picture of costs involved in moving goods and services across the country.
“The artificial neural network method that is a system used globally to determine logistics cost relies largely on international data sets of things coming from outside or business trying to happen with India and things that move out from here. So, international estimates on logistics cost in India is largely based on cost of moving in and out of trading ports in the country that is determined by global shipping lines” said Surendra Ahirwar, joint secretary, DPIIT.
“It is here that determination of logistics cost based on Indian system and involving actual cost within the country will bring out a truer estimates on this critical data that has wide scale ramifications. The cost indexes will further strengthen estimates on logistics,” he added.
“We will soon have a consultation meeting with experts from industry, academic and government on domestic logistics cost index. There is a internal cost and a domestic cost. Much of the transportation cost by the shipping lines and they are not in any sovereign control.”
The current logistics sector stands unorganised and all over the place, which is why the country’s logistics costs as per external estimates are as high as 14-15% of GDP, against 7-8% in developed nations such as the Singapore and the US, which leverage it to boost exports. The National Logistics Policy (NLP) launched in September aims to bring down logistics costs and address logistical challenges. The NLP aims to bring down India’s logistics cost to 8% in the next five years.
