The LEADS [Logistics Ease Across Different States] 2023 Report

What’s in Today’s Article?

• Why in News?
• About the LEADS
• Performance Highlights from LEADS 2023
• Significance of the LEADS Initiative
• Future Prospects of India’s Logistics Sector - From the Perspective of China-Plus-One Strategy

Why in News?

• As many as 11 States and two UTs have been named as ‘Achievers’ in the LEADS [Logistics Ease Across Different States] 2023 report released by the Union Ministry of Commerce and Industry (MoC&I).

Logistics market in India

• Logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to the point of consumption.
• The goal of logistics is to meet customer requirements in a timely, cost-effective manner. The worth of Indian logistics market is estimated at over USD 200 billion.
• The sector provides livelihood to more than 22 million people.

Need for a wholistic logistics policy in India

• The need for a national logistics policy was felt since the logistics cost in India is high as compared to other developed economies.
• It is imperative to reduce the logistics cost in India for improving the competitiveness of Indian goods both in domestic as well as export markets.
• Reduced logistics cost improves efficiency cutting across various sectors of the economy, encouraging value addition and enterprise.

Steps taken by govt to improve logistics market

• National Logistics Policy:
  • In order to facilitate a seamless flow of goods across India, Indian government launched a National Logistics Policy in September 2022.
  • With the implementation of National Logistics Policy, there will be further boost to the development in an integrated logistics ecosystem, reduction in time, wastage & cost, and ensuring sustainability.
• Other measures to improve logistics:
  • The government had introduced PM GATI Shakti Master Plan in 2021.
    • Under the plan, a digital platform is created to bring 16 Ministries including Railways and Roadways together for integrated planning and coordinated implementation of infrastructure connectivity projects.
  • The government has also approved the development of 35 New Multi-Modal logistics Parks under Bharat Mala Pariyojana to reduce logistics cost.
  • For promoting export, 40 air cargo terminals have been constructed. 30 airports have been provided cold-storage facilities.

About the LEADS

• LEADS was conceived on the lines of the Logistics Performance Index of World Bank in 2018 by the Department for Promotion of Industry and Internal Trade (DPIIT), MoC&I.
• While the LPI relies entirely on perception-based surveys, LEADS incorporates both perception as well as objectivity thereby enhancing the robustness and comprehensiveness of this exercise.
• The LEADS highlights shift in States’ performance across the key pillars -
  • Logistics Infrastructure,
  • Logistics Services and
  • Operating and Regulatory Environment
• The 5th edition of the LEADS annual exercise - LEADS 2023 report, provides insights into improvement of logistics performance at State/UT level.
  • It highlights an enhanced overall stakeholder perception and impact of various reforms, across States and UTs.
  • This report, signalling a positive shift in States’ performance across the key pillars, empowers the State/UT Governments by providing region specific insights for informed decision making and comprehensive growth.

Significance of the LEADS Initiative

• The report would play a pivotal role in instilling healthy competition among States/UTs to enhance logistics performance.
  • 23 States/UTs have also notified their State Logistics Policies to align with the National Logistics Policy.
  • Further, 16 States/UTs have given industry status to logistics.
• It helps to enhance the overall competitiveness of Indian logistics eco-system and global positioning.
  • Improvement of India’s LPI rank by 6 places to 38th position in 2023 is a reflection of the same.
  • Digital reforms such as PM GatiShakti, Logistics Data Bank, Unified Logistics Interface Platform (ULIP), and GST were propelling India’s improved ranking at global level.
• The report developed in a collaborative and consultative manner has brought objectivity in assessment of infrastructure development and process-related reforms.

Future Prospects of India’s Logistics Sector - From the Perspective of China-Plus-One Strategy

• Coined way back in 2013, China-Plus-One is a global business strategy in which companies avoid investing only in China and diversify their businesses to alternative destinations.
• For the last 30 years, Western companies have invested heavily in China, attracted by its low labour and production costs, as well as the considerable and growing size of its domestic consumer market.
  • Leading to an overconcentration of their business interests in China.
• Therefore economies (including India) have unveiled a roadmap for establishing collective supply chains that would be resilient in the long term.
  • The roadmap also included steps to counter supply chain dependencies and vulnerabilities.
• For India, the Logistics sector will be a cornerstone in the endeavour to take India to a tenfold growth from $3.5 trillion to $35 trillion by 2047.

Q1) What is PM GatiShakti yojana?

The PM Gati Shakti National Master Plan is a Central government project, aimed to revolutionise infrastructure in India. The Rs 100 lakh-crore project for developing 'holistic infrastructure' in India was announced on the 75th Independence Day.

Q2) What is the Unified Logistics Interface Platform (ULIP)?

ULIP is designed to enhance efficiency and reduce the cost of logistics in India by creating a transparent, one window platform that can provide real-time information to all stakeholders.

Source: 13 States, UTs among "achievers" in logistics performance index: DPIIT report | TH