April 9, 2014
New Delhi


The day-long National Conference on “Smart Supply Chain in India : Challenges and Way Forward” organized by the PHD Chamber of Commerce and Industry in which G D Goenka University contributed a knowledge paper has recommended that the new government should set up Ministry of Logistics to coordinate all the logistics function to enable India develop logistics on par with world class standards to accelerate and deepen its external trade engagements.

The Conference in which Member Planning Commission, Dr. Saumitra Chaudhuri was the Chief Guest and Mr. Dinesh Rai, Chairman, Warehousing Development and Regulatory Authority delivered his key note address suggested that the efficient supply chain will increase the revenue upto 10% and transaction cost fall by 30%, speaks about the criticality of the logistics and thus the need for the new ministry is fully justified.

Currently, there is no nodal ministry in government to coordinate and synergize logistics industries. Since there are separate agencies for railways, shipping, surface transport and civil aviation, leaving huge room for coordination.

Releasing the recommendations of the conference paper with Dr. Chaudhuri and Mr. Rai, President PHD Chamber of Commerce and Industry, Mr. Sharad Jaipuria said that the Indian logistic industry currently valued at Rs.5.5 lakh crore with an annual growth rate of 20% against the world average of 10% would require 4 million logistics professionals in near future also summarized the significance of this industry which can effectively be handled with the creation of the new body as suggested by the Chamber.

The maximum number of manpower in the logistic industry, according to the paper would be required at the worker level, both for technical as well as non-technical jobs such as crane operators, drivers, IT professionals and computer operators.

In the absence of an independent ministry as also required infrastructure for supply chain management, the logistics cost in India is 14% of its GDP whereas it is around 8% in US and 8.5% in European Countries. 

This makes all the commodities expensive for exports and the cheap labour costs in India are marginalized.  Similarly for imported goods both capital goods and imported raw material, the transport and logistics cost is very high, blocking the efficiencies reaching market.

According to PHD Chamber, the infrastructure, both rail and road is inadequate.  Though, India has 3.3 lakh kms of road length one of the largest road network in the world but, National highway consists of only 2% of tatal road length.  Further 40% of the traffic moves on golden quadrilateral between Delhi-Mumbai, Mumbai-Kolkata, Kolkata-Delhi and Delhi-Chennai.