As per the Ministry of Commerce & Industry, India’s position in the World Bank’s Logistics Performance Index 2023 has improved by six places (44th in 2018), and it now ranks 38th among 139 nations. The ministry also mentioned that India has made noteworthy advancements in four out of six LPI indicators.
Logistics Performance Index
- The World Bank Group has created the Logistics Performance Index (LPI), which is a tool that helps countries identify areas for improvement in their trade logistics.
- The LPI evaluates six parameters to measure logistics performance, including –
- customs performance,
- infrastructure quality,
- ease of arranging shipments,
- logistics services quality,
- consignment tracking and tracing,
- timeliness of shipments.
- The World Bank has been reporting the Logistics Performance Index (LPI) every two years since 2010, with a gap in 2020 due to the COVID-19 pandemic and a change in the index’s methodology.
- For the first time, LPI 2023 includes indicators based on large datasets that track shipments, which measure the speed of trade.
Reasons Behind India’s Improvement
- In October 2021, the Indian government introduced the PM Gati Shakti initiative, which is a National Master Plan to improve multimodal connectivity.
- Its primary goal is to reduce logistics costs and boost the economy by 2024-25.
- In 2022, the National Logistics Policy (NLP) was launched by the Prime Minister to ensure quick last-mile delivery, address transport-related challenges, save time and money for the manufacturing sector, and improve the speed of logistics operations.
- The implementation of these policies has been beneficial, as India’s LPI and other logistics-related parameters have improved.
- The recently released LPI report indicates that India’s infrastructure score has improved, with its rank moving up five places from 52nd in 2018 to 47th in 2023.
- This improvement is due to the government’s investment in both trade-related soft and hard infrastructure.
- By connecting port gateways on both coasts to the major economic centres located in the interior regions of the country, India has climbed to the 22nd spot for international shipments in 2023 from 44th in 2018.
- India has implemented a supply chain visibility platform through a public-private partnership that has led to significant reductions in delays.
- This platform, developed by NICDC Logistics Data Services Limited, utilises radio frequency identification tags on containers and provides consignees with end-to-end tracking of their supply chain.
- As per the LPI report, India is one of the emerging economies that is advancing ahead of developed countries in modernization and digitalization.
- Dwell time is the duration for which a vessel or cargo stays at a port or terminal. It can be the time taken by a container or cargo to get loaded onto a vessel or the duration for which it stays at a port after being unloaded from a vessel.
- India’s logistics performance has improved due to its very low dwell time of just 2.6 days.
- The report highlights that India and Singapore had an average container dwell time of 3 days between May and October 2022, which is much better than some industrialised countries.
- In comparison, the U.S. had a dwell time of 7 days, and Germany had a dwell time of 10 days.
Logistics Ease Across Different States (LEADS) Report 2022
- The LEADS report is an annual report released by the Ministry of Commerce and Industry in India since 2018.
- The report aims to provide an assessment of the logistics infrastructure and services in different states and Union Territories in India.
- The report is based on data-driven indices, and it assesses the performance of states on various parameters, including infrastructure, services, and human resources.
- The report helps policymakers identify the strengths and weaknesses of different states and UTs in the logistics sector and formulate strategies to improve logistics performance.
- The report categorises the states based on their percentage scores, with “Achievers” being those who score 90% or more, “Fast Movers” being those who score between 80-90%, and “Aspirers” being those who score below 80%.
- Maharashtra tops the “Achievers” list, followed by 14 other states/UTs.
- Six states/UTs are in the “Fast Movers” category, while the rest are “Aspirers”.
- The LEADS 2022 survey report is a tool that will help the PM Gati-Shakti National Master Plan (PMGS-NMP) and National Logistics Policy (NLP) by providing information on logistics infrastructure, services, and regulatory environment in each state. This will enable state governments to identify any gaps and work towards achieving data-driven multimodal connectivity.
About World Bank
- The World Bank Group was established in 1944 as the International Bank for Reconstruction and Development (IBRD) in conjunction with the International Monetary Fund (IMF).
- It later changed its name to the World Bank. The organisation is a global partnership of five institutions committed to promoting sustainable solutions that reduce poverty and foster shared prosperity in developing nations.
- The World Bank provides financial and technical assistance to developing countries to support their economic and social development.
- The International Monetary Fund (IMF) is an international organisation that works to ensure the stability of the international monetary system, promote international trade, and facilitate economic growth.
- The IMF monitors the economic and financial policies of its member countries and provides loans and technical assistance to help countries overcome economic difficulties.
- The World Bank is a specialised agency of the United Nations, and it has 189 member countries, including India.
India’s rank in other Reports by World Bank:
- Ease of Doing Business Index – 63rd (2019)
- Human Capital Index – 116th (2020)