DPIIT, NCAER Tie Up To Develop Framework For Logistics Cost Assessment In India

The Department for Promotion of Industry and Internal Trade and the National Council of Applied Economic Research signed a Memorandum of Understanding on Friday for the development of framework and assessment of logistics cost in India for FY24.

The NCAER would conduct an assessment of differentials in logistics costs across routes, modes, products, types of cargo, and service operations. It will also identify major determinants along with the influence on the logistics in different sectors, according to a statement by the Ministry of Commerce and Industry, which oversees the DPIIT.

The ministry said that the logistics cost of the country needs to be regularly assessed and monitored so that the data on cost variation will benefit both 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.

This MoU envisages NCAER to conduct the detailed study as above and submit the report within a year's time. This study is likely to result in far-reaching impact for the logistics sector in India.  

The government of India had launched the National Logistics Policy on Sept. 17, 2022. One of the primary objectives of the NLP was to reduce the percentage of logistics cost to the GDP.

In line with this, the logistics division at DPIIT had earlier in December 2023 launched a report, titled Logistics Cost in India: Assessment and Long-Term Framework. This report was prepared by NCAER where a baseline aggregated logistics cost estimate and a framework for long-term logistics cost calculation was prepared.