Business

Understanding the Effect of Logistics Performance

Understanding the Effect of Logistics Performance

The Logistics sector has great performance in the international trade businesses. International trade plays the vital role in the economic growth of the country and employment generation, and to match the international standard of the trade business a country should have the improved logistics infrastructure such as highways, railways, airports, ports, warehousing, etc. 

As this sector deals with the transportation and storing the goods after the manufacturing and before reaching it to the point of consumption to fulfil the customer’s requirement, selling of goods and services from a country to outside the country is known as Export and buying the goods or services from outside the country is known as Import. Export and import both are the part of International trade. For doing the International trade the International routes are required to be developed to connect the countries for the exchange of commodities. 

Steps taken by the Government to improve the logistics performance:-

  • For the development of the logistics sector Government has formed a separate logistics department which can function completely for the growth of logistics sector, Logistic department is responsible for policy changes, Modification in the policy and procedure, encouraging the implementation of new technology in the sector.
  • To Promote the sector Government has launched Multi-Modal Logistics Parks Policy and the National logistics policy. 
  • Logistics data bank has the facility to track the container across the globe to check the status of delivery.
  • MEIS Scheme was launched under FTP to provide benefits in the form of license to the goods exporters.

India’s logistics performance was ranked 54 in 2014 by the World Bank LPI Index moving up it was ranked 35 in 2016 which reflects the improvement of logistics sector, but there are various challenges faced by the logistics industry as follows – 

  • Infrastructure 
  • Fuel Cost in transportation
  • Manpower Management in Logistics
  • Lack of Skilled Labors 
  • Slow transition in newer technologies
  • Warehousing issues 

On 13th March 2020, Union cabinet of India approved RoDTEP Scheme to replace existing export incentive scheme ie MEIS Scheme. 

India has plans to unlock the potential of logistics sector required to fuel the economic growth of the country by putting efforts to build more robust logistics network in the country with best infrastructure planning, increased coordination among the stakeholders, and with the improved operational efficiencies. 

Government of India launched Advance Authorisation Scheme which allows the duty free import of raw materials required to manufacture the export goods, EPC assist exporters for availing the Advance License under the Advance Authorisation scheme.

 

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