Insights on the National Logistics Policy, 2022

On September 17, 2022, the National Logistics Policy (“NLP”) was unveiled by the Prime Minister. The objectives of the NLP are broadly aimed at enhancing efficiency across the logistics value chain by improving connectivity across destinations, adopting technology, simplifying procedural documentation and strengthening the warehousing sector.

While India ranks 44th on the World Bank’s Logistics Performance Index of 2018, the NLP envisions improving India’s ranking to feature amongst the top 25 countries by 2030. The NLP proposes to support this upward journey by means of the initiatives detailed hereinafter.

Identifying the Action Areas

The Comprehensive Logistics Action Plan (CLAP) envisaged in the NLP identifies the following action areas wherein the policy aims to undertake interventions:

  • Developing an ‘Integrated Digital Logistics Systems’ to create a cross-sectoral database for logistics stakeholders.
  • Setting standardisation norms for assets and benchmarking quality of services.
  • Developing human resource and skill building aligned towards logistics by the ministries involved in different sectors.
  • Supporting state level logistics plans and institutional framework development.
  • Streamlining EXIM (export-import) processes to improve trade competitiveness and integration with global value chains.
  • Improving regulatory interface in the logistics sector.
  • Formulating ‘Sectoral Plans for Efficient Logistics’ in different sectors to complement the development of facilitative processes in logistics management.
  • Developing a network of logistics parks, including Multi-Modal Logistics Parks (“MMLPs”),[1] by providing framework guidelines for the development of these parks and encouraging private sector investment in the same.

Inducing Standardisation

The NLP emphasises standardisation with the aim of reducing cost and improving efficiency. To provide a compilation of existing operational standards, the launch of the NLP was accompanied by the launch of the ‘E-Handbook on Warehousing Standards’,[i] which will act as a guiding document for inter alia manufacturers, commerce agencies, logistics service providers, and others involved in the logistics sectors. The E-Handbook on Warehousing Standards, inter alia, prescribed the standards for the construction of warehouses, palletisation standards, and transportation standards.

The NLP foresees that standardisation would support the development of the co-warehousing segment, which allows businesses to use common warehouse and allied office space as per requirement. This will be beneficial to small businesses and start-ups and will also open up another avenue for private sector investments in the Indian warehousing market.

Improving Interfaces

The NLP provides for development of two main portals, viz., the ‘Unified Logistics Interface Platform’ (“ULIP”) and ‘E-LogS: Dashboard for Ease of Logistics Services’ (“E-Logs”), to provide digital platforms that facilitate the regulatory and operational processes in the logistics sector. The key features of the aforementioned portals are summarised below:

Feature ULIP E-Logs
 
Objective To provide a single window platform that enables the exchange of information on a real-time basis amongst different stakeholders. Furthermore, to ensure the authenticity of every logistics department transaction. To provide a digital system for registering and monitoring problems encountered in the logistics sector and facilitating time-bound resolution of the same.
Key Constituents

Comprised of three layers, the Integration layer and the Governance layer of this platform provide for coordination amongst different ministries and departments.

The third layer, being the Presentation layer, is to be developed by private players to provide an interface with the end-customer.

This dashboard will be accessible to registered users who can login to register their issues with supporting documentation and communicate the same to other stakeholders using the same portal.

Decisions on such issues will be taken by the relevant ministry/department and the decision will be uploaded by the Service Improvement Group (“SIG”), which is responsible for overall coordination and monitoring in relation to E-Logs.

The NLP provides that the SIG will be constituted by nominated officers from various ministries and will be tasked with the resolution of issues pertaining to “services, documentation, processes and policy, along with the identification of interventions for improving the user interface.”
Benefit to Stakeholders

It is expected that ULIP will, inter alia, help:

·         Governmental agencies can access information for better planning;

·          allow transporters to track cargo in real time and identify cheaper logistics modes; and

·         simplify the documentation process for logistics service providers and enable value-added services for end customers.

 Authorized users who are dissatisfied with the resolution of their issues can track the progress of the resolution and make suggestions.

 

Way Ahead

The NLP sets a positive tone for the efficient expansion of logistics services in India by addressing fundamental concerns such as time and efficiency of transportation, reducing logistics costs, and simplifying operational and regulatory processes with technology-based interventions. In addition to the above-summarised features, the NLP also focuses on ‘Logistics Ease Across Different States’ (LEADS), which is a survey taken across states and union territories to assess the viewpoint of stakeholders, document issues faced on the ground in relation to the logistics sector, and identify mitigation measures to ameliorate the identified issues. This reflects the efforts being made towards the development of practically viable mechanisms that facilitate improvements in the logistics sector, which is further strengthened by the framework of the NLP.

The realisation of the policy objectives, however, largely depends on achieving coordination amongst the different central ministries and other stakeholders. Given that state governments may have their own policies framed around the development of logistics parks, it is important to ensure that states adapt the National Logistics Policy in harmony with the existing benefits being offered for setting up logistics parks under state-specific policies, especially when it comes to setting up MMLPs. Ensuring the existence of statutory provisions in relation to the components of NLP would help provide a check on the working of the mechanisms stipulated thereunder. For instance, rules and regulations on management of information communicated via ULIP and E-Logs can provide a safe transaction environment for stakeholders utilising these portals.

A major concern of players in the logistics sector linked to the cost of financing logistics projects, may continue to pose an obstacle while addressing the objectives of the policy. Thus, formulating ancillary options for availing finance at discounted rates would be a boost to the policy. Similarly, the inclusion of an exemption on Goods and Services Tax could help ease the burden of compliance under the policy for smaller players.

References:

[1] MMLPs are aimed at providing a host of facilities in the logistics chain such as storage, distribution and facilitating transportation by serving as a common point for shift in intramodal transportation of goods.

[2] Logistics Division, Department of Commerce, Ministry of Commerce and Industry, Government of India, E-Book on Launch of National Logistics Policy.

[3] E-Handbook on Warehousing Standards- available at pdf (dpiit.gov.in)

[4] The World Bank, Country Score Card: India 2018, available at Country Score Card: India 2018 | Logistics Performance Index (worldbank.org).

 

While India ranks 44th on the World Bank’s Logistics Performance Index of 2018, the NLP envisions improving India’s ranking to feature amongst the top 25 countries by 2030. The NLP proposes to support this upward journey by means of the initiatives detailed hereinafter

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The Metaverse and its Numerous Concerns

There is a lot of buzz being generated around the “Metaverse,” which can be defined as a virtual reality-based shared digital world in which users (through their “avatars”) can enjoy three-dimensional, multi-sensory experiences. This rapidly-evolving, technology-driven paradigm is a huge shift away from the present, where digital interactions are based on text, audio and two-dimensional images/videos. The excitement around the Metaverse is due to the immense possibilities that exist around how it can be used for social interactions, commerce, media & entertainment, education, manufacturing, healthcare, defense etc. Not surprisingly, many companies, even in India, are investing in Metaverse capabilities.

While the potential for metaverse cannot be denied, it is just as important to recognize and acknowledge that there are several grey areas around this paradigm. If timely actions to prevent the misuse of the metaverse are not taken by the global community, we run the serious risk of opening a new Pandora’s Box. And once the proverbial genie is released from the bottle, it is virtually impossible (pun intended) to put it back inside.

The Potential Dangers of the Metaverse

 
What are the biggest fears surrounding the Metaverse? Concerns have been expressed from different quarters around issues relating to the privacy, safety and well-being of people who are active in the metaverse. In the current scenario, people use social platforms to connect with each other. If someone with whom I do not wish to engage seeks to connect with me in a basic digital world, I can easily deny the friend request. Even after having granted them permission initially, I can choose to block such persons. During the time they have permission to engage with me, the worst that can happen is that they send unwanted texts, audio messages or images and videos.

This is bad enough, but in the metaverse, the kind and nature of obscene or harmful content will change drastically; consequently, so will the impact of such material and experiences on vulnerable segments of society. 

For example, in the metaverse, it is quite possible for complete strangers to enter someone else’s personal space – without the latter being aware of who the former is. Given the multi-sensory capabilities of the metaverse, which includes haptic technology (the sense of touch), the experience and impact can be far worse. Arguably, the metaverse (as it exists currently) lends itself more easily to bullying, sexual abuse or intimidation. Indeed, there have been recent media reports that some VR-based games that are accessible to young children contain inappropriate content. 

AI-driven deep fakes can further muddy the waters by creating and distributing patently false content that is almost impossible to detect as fake. There is enough fake information circulating on Whatsapp as it is, think of the danger of content that purportedly shows politicians or others saying things designed to inflame emotions.

NFTs will be key to the evolution and growth of the metaverse, providing owners of physical assets such as paintings and IPR such as rights to music, movies etc. new avenues to monetize them at scale. Cryptocurrencies and tokens are likely to form the principal currency in the metaverse, powering commerce and payments. As of now, cryptocurrencies are anonymous and independent of mainstream banking and financial systems. 

In the absence of regulations that are uniformly enforced globally, such parallel payment systems can be easily misused for illegal and immoral activities and transactions, including child sexual abuse. It is likely that fraud and crimes will increasingly crisscross between the current digital world and the metaverse (and perhaps the physical world), making them harder to detect and bring the perpetrators to book.

Addressing the Issues Surrounding Metaverse 

 

A multipronged approach is key to addressing the potential dangers of the metaverse. It is vital to frame appropriate legislation and arm various regulatory agencies with the power to catch and punish violators is vital. The basic premise around legislation has to be this: if something is illegal or against the law or generally accepted social mores in the “real”, physical world, it must be treated the same way in any parallel “virtual reality” based universe.

However, legislation alone cannot secure the metaverse. It will be essential to hold creators of content and platforms that enable distribution and access responsible for violations. The metaverse infrastructure needs to be designed with more intent to put in place appropriate safety mechanisms right at the beginning. As a global society, we must learn from our experiences with the downsides of social media platforms (false information, cyber-bullying, digital fraud etc.) and take preemptive actions that can prevent problems before they become common. This is significant because changing processes after people have grown accustomed to them is never easy; also, some damage may have already occurred. It may also be necessary to think of ways to incentivize good behaviour in the metaverse.

The metaverse is expected to surge ahead quickly on its evolutionary path. Its trajectory cannot be predicted in advance, therefore, what is needed is constant vigilance and for global action to be taken in a concerted manner. The UN system is supposed to be the primary keeper of international order. A number of events over the past couple of decades have painfully driven home the point that the UN architecture needs an urgent and major overhaul. As part of this exercise, it may be useful to establish a new global body tasked with the responsibility of overseeing and governing the metaverse. Regional political/economic blocs must be encouraged to ensure that their members comply with rules and regulations related to the metaverse.

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The metaverse is expected to surge ahead quickly on its evolutionary path. Its trajectory cannot be predicted in advance; therefore, what is needed is constant vigilance and for global action to be taken in a concerted manner.

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