Harnessing Gati Shakti, National Logistics Policy for closer regional ties

Source: The post is based on an article “Harnessing Gati Shakti, National Logistics Policy for closer regional ties” published in The Business Standard on 21^st September 2022.

Syllabus: GS 3 – Infrastructure

News: The government has announced two major initiatives to develop infrastructure of India. These initiatives can be helpful in regional integration as well.

The two initiatives are – a) Gati Shakti, or the National Infrastructure Master Plan and b) the National Logistics Policy.

These two are interrelated pillars that will help India to become a competitive economy.

What are the features of Gati Shakti?

About Gati Shakti

What are the features of National Logistic Policy (NLP)?

It aims to create a multi-modal connectivity network that enables easy movement of goods, services and people across the country.

The policy provides for a Unified Logistics Interface Platform (ULIP). It is a digital platform that will store information about cargo movements across the country and provide clearances for such movements.

The policy focuses on the target to reduce overall logistics and supply chain costs in India from 12 per cent of GDP to the global average of 8 per cent.

India’s rank in Logistic Performance Index (LPI) issued by World Bank is 35. It is low when compared to other countries. It will be achieved through integration of local supply chains with international supply chains.

How Gati Shakti and NLP can help India’s neighbours?

The integration of Gati Shakti and NLP will help in regional economic integration.

Components of the Gati Shakti and NLP can be expanded to India’s neighbors.  It can become a powerful instrument for their economic and social development.

For example, the objectives of Gati Shakti and NLP can be applied to transport connectivity with the member countries of SAARC.

It will help in improving the regional and digital connectivity among countries for smooth movement of goods and people across borders.

India should seek to become the transit country of choice and the most preferred development partner for all the countries of the Indian subcontinent. It is possible by giving the neighboring countries a “national treatment”, in terms of access to India’s transportation and logistics network.

This can be done by integrating waterways through the Bangladesh, Bhutan, India and Nepal (BBIN) sub-regional cooperation platform. Further linking the several cross-border rivers can also be done.

Moreover, the development of new ports in the BBIN countries can be done by promoting coastal shipping (Sagarmala) and ocean trade.

NLP includes setting up of modern warehousing and logistics facilities at nodal points across India. Such shared facilities can be extended to the neighboring countries also.

The objectives of NLP and Gati Shakti can also be introduced on the BIMSTEC platform that seeks to integrate South Asia with Southeast Asia.

Other areas that can be extended to neighboring countries are the expansion of rail services, the greater utilization of water transportation, etc.

These areas are important for enhancing energy security and fighting climate change. However, there are other steps that can be taken to give regional dimensions to Gati Shakti and NLP.

What steps can be taken by India to give regional dimensions to Gati Shakti and NLP?

First, India should reshape the architecture of these initiatives to enable their extension to our neighboring countries.

Harnessing Gati Shakti, National Logistics Policy for closer regional ties the initial focus may be made on river transportation and coastal shipping among the BBIN and island Neighbours.

Third, India should offer participation to interested neighboring countries in India’s ULIP.  It will provide benefits of lower transaction and supply chain costs to those countries.

With little efforts Gati Shakti and NLP have the potential to become the key pillars of our Neighborhood First Policy.