DPIIT & NCAER Partner to Assess Logistics Costs in India

New Delhi, Jul 5 (PTI) The Department for Promotion of Industry and Internal Trade (DPIIT) has inked a pact with think tank NCAER to develop a detailed framework for assessment of logistics cost and carry out a study for assessment of the cost for 2023-24.

The Ministry of Commerce and Industry said in a statement that the think tank would also do an assessment of differentials in logistics costs across routes, modes, products, types of cargo, and service operations; besides identifying major determinants along with influence on the logistics in different sectors.

It said the logistics cost of the country needs to be regularly assessed and monitored such that the data on cost variation will both benefit the industry and the policymakers.

This process involves using data on 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.

"With this objective, DPIIT and NCAER today signed an MoU with a key deliverable of developing a detailed framework for assessment of logistics cost in the country," the ministry said.

The Government of India launched the National Logistics Policy (NLP) on September 17, 2022, and one of the primary objectives of the policy was to reduce the percentage of logistics cost to the GDP.

In line with this, the DPIIT had earlier launched a report titled Logistics Cost in India: assessment and long-term framework in December 2023.

This report was prepared by National Council of Applied Economic Research (NCAER) where a baseline aggregated logistics cost estimate and a framework for long-term logistics cost calculation was prepared.

According to that report, the logistics cost in India ranged from 7.8-8.9 per cent of gross domestic product (GDP) in 2021-22.

This MoU envisages the NCAER to conduct the detailed study and submit the report within a years' time.

This study is likely to result in far-reaching impacts on the logistics sector in India.