New Delhi, May 28: The commerce ministry has proposed creation of a separate department for trade facilitation and logistics for better coordination among different government units, an official said. Currently, there is no single department to look at all the aspects related to logistics covering various modes of shipment such as sea, roads and railways.
The proposal is part of a 100-day action plan prepared by the ministry for the new government, which will take office on May 30.
“Creation of a separate department for trade facilitation and logistics will lead to better coordination,” the official said.
At present, a logistics division is functioning under the department of commerce and headed by a special secretary-level officer.
Logistics is a key component for increasing competitiveness of exporters and domestic traders by reducing transport cost and time, and expediting smooth movement of goods.
The official said that the sector needs lot of coordination among different ministries and departments including railways, road and shipping.
In January this year, Economic Advisory Council to the Prime Minister (EAC-PM) has suggested setting up a separate logistics department to boost transport sector and improve ease of doing business.
The ten-point action plan has also proposed rolling out of national logistics policy, multi-modal logistic policy, integrated national logistics action plan, and logistics planning and performance management tool.
As per the plan, a Multi-Modal Transportation of Goods (MMTG) bill will be introduced in Parliament, which will replace the existing MMTG Act, 1993.
The new bill would introduce new concepts like regulation of self-regulatory agencies and facilitate smooth movement of products for domestic consumption as also foreign trade.
Commerce and industry minister Suresh Prabhu has taken a series of steps to cut logistics time and cost to push both domestic and foreign trade.
“A detailed Integrated National Logistics Action Plan will be rolled out covering over 60 interventions, focused on driving logistics development and logistics efficiency in the country,” the official said, adding that the identified interventions have the potential to reduce the logistics cost in the country by Rs 20,000 crore.
The interventions identified would focus across the complete value chain of logistics including transportation, warehousing, processes, technology as well as skilling.
The logistics cost of exports is very high, making Indian goods less competitive in global markets.
According to a report, about 14 per cent of the total value of goods goes into the logistics cost while in other major economies it is just 6-8 per cent.