Government considers survey to gauge business logistics costs

The Department for Promotion of Industry and Internal Trade (DPIIT) reportedly intends to commission the National Council of Applied Economic Research (NCAER) to carry out a primary survey, evaluating patterns of cargo movement and the associated logistics costs for each aspect involved.

In the previous year, the think tank had approximated India's logistics costs for 2021-22 at 7.8-8.9% of the GDP, relying on secondary data. An unnamed official expressed intentions to conduct a new assessment with NCAER, merging feedback and original surveys, as the previous estimation was solely based on secondary data.

The official mentioned that discussions are underway for a memorandum of understanding between the department and the council for this purpose. The collection of detailed data concerning origin-destination pairs, commodities, and geographical locations is deemed crucial for precise estimations. Additionally, efforts are being made to elevate India's ranking in the World Bank Logistics Performance Index from 38 in 2023 to below 25.

The government's objective is to devise a methodology to fulfill dual goals of timely and reliable measurements of logistic costs, along with strategies to alleviate such expenses by eliminating obstacles.

The survey aims to illuminate the logistics cost per tonne per kilometre on various considered routes and disparities in logistics costs across routes, transportation modes, products, cargo types, and service operations.

Discussions are underway regarding origin-destination route surveys of selected products to gather data on relevant transportation and storage costs, administrative hurdles at customs, warehouses, freight and forwarding agencies, and ports, as disclosed by informed sources.