Page 490 - ES 2020-21_Volume-1-2 [28-01-21]

External Sector 117

and ideas, which will help in improving its capabilities to innovate further. Promotion of the
manufacturing sector and creation of a conducive manufacturing ecosystem will not only
enable integration with the global supply chains but also establish backward linkages with the
MSME sector in the country. This will lead to overall growth in the economy and create huge
employment opportunities.
Trade Related Logistics

3.41 The COVID-19 pandemic has underscored the need for a resilient logistics sector that can
respond to emergencies and supply chain disruptions. Despite the sector being plagued by some
structural issues such as highly fragmented ownership; few large players; lack of consolidation
in operations; sub-optimal modal share with freight movement highly skewed towards road
sector; lack of an integrated approach by user sectors (multiple line ministries and agencies);
absence of consistent policies and regulations; etc., India has made remarkable progress in
logistics sector.

3.42 India’s rank has improved significantly in trading across borders parameter of ‘Ease of
Doing Business’ index from 146 in 2018 to 68 in 2020. The parameter assesses the time and
cost associated with the logistical process of exporting and importing goods. The Logistics
Performance Index (LPI), released by the World Bank, assesses relative logistics efficiency of
countries. On this index, India was ranked 44 out of 160 countries in 2018 vis-à-vis rank of
54 in 2014. India is among nine countries having area above ten-lakh square kilometer out of
24 countries analyzed by LPI in 2018, with a score above three. India performs above average
after controlling for the level of development and better than some of its BRICS peers (Figure
20).

Figure 20: LPI scores controlling for level of development

4.5
4.0 India China
LPI Score (2018) 3.0 Brazil Russia
3.5

2.5

2.0
1.5
6.0 7.0 8.0 9.0 10.0 11.0 12.0
Log Per Capita Income (PPP) (2018)
Source: Based on World Bank dataset

3.43 The National Logistics Policy is in an advanced stage of roll-out with a vision to develop
a modern, efficient and resilient logistics services sector that builds on dynamic processes,
technology and professional manpower to seamlessly integrate multiple modes of transportation
and inventory management to provide more reliable, cost effective, greener, safer and equitable
logistics solutions.