union budget 2023: Prime minister Narendra Modi The National Logistics Policy (NLP) was launched last year to ensure speedy last mile delivery, eliminate transportation challenges, save time and money for manufacturers and prevent wastage of agri-produce.
The need for NLP was felt since the logistics cost India higher than in other developed economies. Reducing the logistics cost in India is imperative for improving the competitiveness of Indian goods in both the domestic and export markets.
The reduction in logistics cost cuts efficiency, adds value and encourages enterprise in various sectors of the economy.
Union Budget 2023 will be the first budget after the announcement of NLP. The industry is looking forward to several measures to take the sector forward in terms of strengthening infrastructure for logistics and focus on sustainable logistics.
Kami Viswanathan, Senior Vice President, FedEx Express, Middle East Indian Subcontinent and Africa (MEISA) Operations, shared that while NLP will be critical to the growth of the logistics and supply chain ecosystem, FedEx recommends a special focus on air cargo. Is.
“Development and expansion of airports to meet the rapidly growing demand for air cargo capacity and digitized systems to streamline cross-border shipments will be essential to ensure seamless freight movement to and from India. Vishwanathan said, a more efficient air express infrastructure would improve global competitiveness, ensure on-time deliveries and boost India’s ambition of becoming a $5 trillion economy by 2025.
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Yogesh Patel, CFO, Mahindra Logistics also said that the announcement of NLP clearly sets the direction to improve the efficiency and transparency of operations. The multiple interventions in the logistics ecosystem, which the policy defines, should be adequately funded by the budget so that its impact is seen in the years to come.
“We are looking forward to initiatives from the Union Budget to support the growth of our economy. The budget should continue to give priority to the improvement of logistics infrastructure in roads, warehouses and ports,” Patel said.
The experts also underlined that one of the focus areas for the budget could be on increasing transparency and visibility, which can be achieved through the Unified Logistics Interface platform when integrated into the system.
Vishwanathan highlighted that MSMEs are the growth engine of the Indian economy. Indian small and medium-sized businesses are prioritizing cross-border trade to thrive in the post-pandemic world. FedEx recommends allowing export and import shipments of all categories through Express mode.
“We also recommend elimination of value and weight restrictions for clearance under courier rules. This will further boost exports from India, especially for MSMEs engaged in cross-border e-commerce, and as a manufacturing hub will enhance India’s competitive advantage,” Vishwanathan said.
It is important to note that the e-commerce industry in India has seen rapid growth over the past few years and the pandemic has only accelerated it further.
The Indian e-commerce market is expected to reach $120 billion by 2026, according to a joint report by industry body FICCI and property consultancy Anarock.
It added that the rise of e-commerce will boost the economic growth of the warehousing and logistics sector in the region.
In addition, for the budget, FedEx recommended implementing a zero-rating of the Goods and Services Tax for all international transportation services.
Most international GST/VAT laws ‘zero-rate’ international freight transport services. Viswanathan said this would facilitate trade and bring down logistics costs along with aligning India with international tax practices.
Patel anticipates that the budget will give priority to strengthening infrastructure for logistics and related services and taking forward connectivity initiatives across various economic sectors, making logistics an enabler to reduce cost and time and boost productivity and the economy. The environment will be ready.
Vishwanathan concluded that the budget should not only lay out a roadmap for sustainable development in the logistics sector but also encourage logistics players to adopt sustainable practices.
NLP aspires to reduce the cost of logistics in India to be at par with global benchmarks by 2030, strive to be among the top 25 countries by 2030 in the Logistics Performance Index rankings, and drive data for an efficient logistics ecosystem Creates a decision support system.
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