Transforming India's Supply Chain: The Gati Shakti Master Plan and Beyond

For any business to succeed, supply chain is a critical function. Goods and services must move across the country. This movement depends on a connected network of organisations, people, information, various activities. Right from the supply of raw materials to the delivery of the finished goods to the customer.

Ten years ago, India was riddled with multiple problems.? The current government has prepared a master plan called Gati Shakti to strengthen India’s supply chain ecosystem.

The supply chain ecosystem is rapidly developing. The pandemic helped to increase online commerce. Consumers want quick and efficient delivery which has led to logistics companies to adopt new tools, technologies and models to increase speed, package and volume. It has also led to last mile delivery solutions.

Rural India has not been left out. Parcel logistics (small packages) has got a tremendous boost and has led to the transformation of supply chain. A new business model has also been created with an ecommerce platform + logistics provider coming together.

A fallout of ecommerce has been the demand for warehouse and inventory management. Multimodal logistics park, distriparks, use of robotics and automation in warehouse operations etc.

There has been a very fast adoption of IoT solutions, blockchain technology. Real-time data, automation, and transparent records of the movement of goods are leading to faster and more efficient deliveries, reduced wastage, and improved customer service. Additionally, the rise of e-commerce has forced businesses to invest in last-mile delivery solutions, further improving the efficiency of the supply chain.

PM Gati Shakti - National Master Plan a PM Gati Shakti - National Master Plan for Multi-modalor Multi-modal Connectivity

The PM GatiShakti National Master Plan (NMP) for multimodal connectivity is a transformative approach for improving logistics efficiency and reducing logistics cost, with a focus on the integration of existing and proposed infrastructure development initiatives of different agencies, to ensure first and last-mile connectivity, for seamless movement of people and goods.

It is a transformative approach for economic growth and sustainable development. The approach is driven by 7 engines, namely: Railways, Roads, Ports, Waterways, Airports, Mass Transport and Logistics Infrastructure

The multi-modal connectivity will provide integrated and seamless connectivity for movement of people, goods and services from one mode of transport to another. It will facilitate the last mile connectivity of infrastructure and also reduce travel time for people.

It will incorporate the infrastructure schemes of various Ministries and State Governments like Bharatmala, Sagarmala, inland waterways, dry/land ports, UDAN etc. Economic Zones like textile clusters, pharmaceutical clusters, defence corridors, electronic parks, industrial corridors, fishing clusters, agri zones will be covered to improve connectivity & make Indian businesses more competitive. It will also leverage technology extensively including spatial planning tools with ISRO (Indian Space Research Organisation) imagery developed by BiSAG-N (Bhaskar Acharya National Institute for Space Applications and Geoinformatics).

National Logistics Policy

To complement the PM GatiShakti National Master Plan (NMP), the government has introduced the National Logistics Policy. ?The policy aims to reduce logistics costs, improve the competitiveness of Indian goods, and promote economic growth. It also aims to improve the skills of the resources in the logistics sector

It has four features: Integration of Digital System (IDS), Unified Logistics Interface Platform (ULIP), Ease of Logistics (ELOG), and System Improvement Group (SIG).

Use of digital technology

The Indian government aims to improve the efficiency of the logistics sector by streamlining processes and adopting digital technologies along with AI, blockchain and ML. The NLP includes the following digital platforms

·?????? Unified Logistics Interface Platform (ULIP)- An open-source platform that integrates 33 digital systems across ministries to provide real-time tracking and monitoring of shipments.?

·?????? Ease-of-Logistics Services (E-Logs)- A portal that facilitates reporting and resolving grievances to governments.

·?????? Integration of Digital System (IDS) - A platform that facilitates coordinating efforts across various ministries.

·?????? Logistics Data Bank (LDB) - A platform that tracks and traces EXIM containers.

Transportation Infrastructure

The government has been developing the infrastructure at a very fast pace. Whether it is roads, airports, railways, waterways.

Double freight corridor project

The Indian Railways' Dedicated Freight Corridor (DFC) is a 3,260 km project that consists of two routes: the Eastern Dedicated Freight Corridor (EDFC) and the Western Dedicated Freight Corridor (WDFC). The EDFC runs from Ludhiana in Punjab to Dankuni in West Bengal, while the WDFC runs from Jawaharlal Nehru Port in Mumbai to Dadri in Uttar Pradesh.

The project's goal is to improve transportation technology, increase productivity, and reduce unit transportation costs.

Roads, highways, and expressways

According to the Minister of Road Transport and Highways, India has the second largest road network in the world. At the end of 2024 our National Highway Road network will be equivalent to the road network of USA

Bharatmala Pariyojana, also known as the Bharatmala Project, is a government-funded project that aims to build a network of roads, highways, and expressways across India. The project aims to improve connectivity across the country, especially along economic corridors, border regions, and far-flung area. Phase 1 includes economic corridors, inter-Corridors & feeder roads, border & International connectivity roads, coastal & port connectivity roads, and expressways.

India’s Ministry of Road Transport and Highways (MoRTH) and National Highways Authority of India (NHAI) have identified several highway corridors of economic importance and see them carrying 25% of freight by 2030.

As of March 2024, India has 44 economic corridor projects that identify around 26,163 km of new and existing routes to be upgraded to expressway standards. Some of the economic corridors in India include Pune–Vijayawada economic corridor, Raipur–Dhanbad economic corridor, Ludhiana–Ajmer economic corridor, Surat–Nagpur economic corridor, and East Coast economic corridor.

In 2024, India is poised for a substantial expansion of its highway network, as new expressways are set to transform the country’s transportation landscape in the coming months. Expressways like Delhi-Mumbai, Bengaluru-Chennai, Dwarka-Delhi, Delhi-Amritsar-Katra, Delhi-Dehradun, Delhi-Dehradun, Ganga expressway that connects east UP to west UP.

Waterways

Sagarmala project

The Sagarmala Programme is the central government initiative to improve India's logistics sector by using the coastline and waterways. The program's goal is to reduce the cost of logistics for domestic and international cargo while minimizing infrastructure investments. It is based on four pillars: Port modernization and new port development, Port connectivity enhancement, Port-linked industrialization, and Coastal community development.

Air transport

The central government has embarked on improving the aviation sector. Introduction of the Regional Connectivity Scheme aims to promote regional air connectivity in the country including North Eastern region and creating additional infrastructure by revival of unserved and underserved airports/airstrips.

UDAN scheme is a game-changer for regional connectivity in India. This scheme focuses on enhancing air connectivity to underserved and unserved airports across the country. By providing financial incentives and reducing airport charges, the UDAN scheme encourages airlines to operate flights to remote regions, enabling affordable air travel for the common citizens and facilitating economic development.

India’s position in the global supply chain

India has become an important player in the global supply chain. Multinational companies are looking at India to seek lower costs, easy accessibility to markets and good infrastructure. The strategic location with well established sea routes gives India a tremendous advantage.?

The recent announcement of the signing of the Long-Term Bilateral Contract on Chabahar Port Operations in Iran, strengthens India’s position, globally.? The Chabahar port forms a crucial link in the International North South Transport Corridor.

India Middle East Economic Corridor was announced during G-20. According to G20 Sherpa Amitabh Kant, it has the potential to have a long-term impact to deepen physical connectivity, unlock tremendous commercial opportunities and reshape global trading routes. He said that about half the global economy and 40% of the world’s population are represented by the eight IMEC signatories - India, US, UAE, Saudi Arabia, France, Germany, Italy, and the EU. The initiative’s comprehensive approach encompasses connecting the key commercial hubs, supporting the development and export of clean energy, expanding energy grids and telecommunication networks, promoting clean energy technologies, and enhancing internet access for communities. The project can be described as a green and digital bridge linking continents and civilizations.

Sources: IBEF, Economic Times, ET Auto, Financial express, india.gov.in, Forbes, The Times of India, New Indian Express, Business Standard

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