India’s supply chain and logistics sector, one of the largest globally and worth $215 billion growing at a CAGR of 10.5 per cent, faces several barriers to growth despite its criticality to the economy. An unbalanced logistics modal mix, high indirect costs, fragmented infrastructure and networks, and limited technology adoption has been hampering the sector’s growth.

To bridge the current competitiveness gap of $180 billion, India needs to reduce logistics cost from 14 per cent of GDP to 7 per cent, said Barnik Chitran Maitra, Managing Partner of the management consultancy firm Arthur D Little India and South Asia and lead author of a report ‘Reimagining India’s supply chain: A bold vision for 2030’. The report by the firm and the Confederation of India Industry highlights the need for immediate attention given the high logistics cost of 14 per cent of GDP in India compared to 8-10 per cent of GDP in the US and Europe.

The report brings to light these issues, sets a bold Vision 2030 and lays the roadmap for ensuring global competitiveness of India’s supply chain. It was released by Pawan Kumar Agarwal, Special Secretary (Logistics), Government of India, at the CII National Packaging Conference on Friday.

The report details the improvements needed to make India’s supply chain competitive. It provides a glimpse of learnings from around the world, presents five imperatives for the Indian supply chain, and sets aspirations to achieve Vision 2030. It also brings to light the vulnerabilities that the supply chain network is exposed to if transformative actions are not taken.

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India’s supply chain industry needs to be reimagined and efforts need to be made to move towards creating an optimised and digitised logistics ecosystem, a de-layered distribution system and a green, resilient and flexible supply chain. The reimagined supply chain will help realise the Prime Minister’s Atmanirbhar Bharat vision and supplement Make-in-India and Start-up India strongly, catering to the global supply chain, he said.

The report said that supply chains are transforming globally by adopting Industry 4.0 trends including agile networks, disruptive technologies, end-to-end visibility, and risk mitigation versus risk management. India can benefit from the experience of mature economies, which have used emerging technologies such as artificial intelligence, blockchain, and the Internet of Things to enhance supply chain operations and resilience.

To make India’s supply chain competitive, efficient, and resilient, Vision 2030 aims to pare logistics cost to 7-8 percent of GDP, optimise the logistics modal mix, digitise 90 per cent of supply chain operations, develop omni-channels, move towards green supply chains and enhance skill development.

The report takes a long-term view of the Indian supply chain and sets five broad aspirations to achieve Vision 2030. They are optimise the logistics and warehousing network; hasten adoption of cutting-edge technology; restructure the supply chain; enhance skill development and talent management and move towards a green supply chain.

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