Logistics Performance Index | Key Highlights of India’s Progress

India improves in the logistics ranking of the World Bank by jumping 6 places to Rank 38 out of 139 countries in the 7th edition of Logistics Performance Index (LPI 2023).

Key Highlights of the Logistics Performance Index (LPI)

• The LPI 2023 allows for comparisons across 139 countries.
• The LPI 2023, for the first time, measures the speed of trade with indicators derived from big datasets tracking shipments.
• Singapore and Finland are the most efficient and highest-ranked LPI countries as per the 2023 LPI.

India’s Progress in the Logistics Performance Index (LPI)

• India was ranked 44th on the index in 2018 and has now climbed to 38th in the 2023 listing.
• On 4 out of 6 LPI indicators India has seen remarkable improvement on the back of various initiatives being implemented over the past few years.
• India’s performance has drastically improved from 2014, when it was ranked 54th on the LPI.
• India’s rank moved up five places in infrastructure score from 52nd in 2018 to 47th in 2023.
• It climbed to the 22nd spot for international shipments in 2023 from 44th in 2018 and moved four places up to 48th in logistics competence and equality.
• India witnessed a 17-place jump in rankings, whereas it moved up three places in rank in tracking and tracing to 38th.
• The report quotes modernization and digitalization as a reason for emerging economies, like India, to leapfrog advanced countries.

The Logistics Sector in India

• The logistics industry comprises all supply chain activities, mainly transportation, inventory management, the flow of information, and customer service.
• Logistics is essential for the economy of a country. It pertains to the general method of controlling how resources are obtained, housed, and delivered to their ultimate location.
• The logistics industry in India is witnessing rapid growth owing to infrastructure, technology, and the emergence of new types of service providers that are reshaping the sector by reducing logistics costs and providing effective services.
• The government is going by certain estimates which suggest that logistics cost in India stands at about 13-14 percent of the country’s GDP.

Government Initiatives to Boost Logistics Efficiency

• In October 2021, the Government of India launched the PM GatiShakti National Master Plan (PMGS-NMP) towards a coordinated approach, leveraging technology, for infrastructure planning and development.
• In September 2022, the Prime Minister launched the National Logistics Policy (NLP) which acts as a guiding document for States / UTs seeking to formulate logistics policy (19 States / UTs have notified their logistics policy).
• The policy is centred around upgradation and digitisation of logistics infrastructure & services.
• NICDC’s Logistics Data Bank project applies radio frequency identification (RFID) tags to containers and offers consignees end-to-end tracking of their supply chain.
• Its implementation started in 2016 on the Western part of India and was scaled up to Pan India level in 2020. 
• The Logistics Data Bank project promotes healthy competition amongst the ports as it provides information on performance benchmarking, congestion, dwell time, speed, and transit time analysis.
• Further other initiatives like Sagarmala which aims to improve connectivity to ports and reduce cargo dwell time and Bharatmala which focussed on improving road connectivity of major corridors have played a pivotal role in improving India’s logistics efficiency.

What is the Logistics Performance Index (LPI)?

• The Logistics Performance Index (LPI) is a logistics capacity index created by the World Bank.
• It analyses differences between countries in terms of customs procedures, logistics costs and the quality of the infrastructure for overland and maritime transport.
• It is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance.
• The Logistics Performance Index is reported by the World Bank every two years

Dimensions

• It is the combination of the weighted average of the country scores on six key dimensions:

1. 1. Customs performance,
   2. Infrastructure quality,
   3. Ease of arranging shipments,
   4. Logistics services quality,
   5. Consignments tracking and
   6. Tracing and timeliness of shipments as well as practical data measuring logistics efficiency.

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