Gujarat Tops Logistics Performance Index Again In 2021

A report by the Commerce Ministry has indicated that for the third time in the row, Gujarat has topped the logistics index chart. The logistics index chart indicates the efficiency with which the logistical services work in a region that results in both exports and economic growth. Gujarat was followed by other states like Haryana, Punjab, Tamil Nadu, and Maharashtra. In addition to ranking the states on the basis of their logistic ecosystems, the report further highlighted the logistical issues that are prevalent in the sector along with recommendations to solve the same. 

How Trade Logistics Is Measured?

The logistic index chart and trade logistics consider a wide number of parameters for preparing its ranking. A few of the most common parameters used for the ranking include customs, infrastructure, tracking and tracing, ease of international shipments, logistics service quality, and timeliness. Good logistic services like VRL highly reduce the trade costs and they have a strong supply chain. 

Generally, the Logistics Performance Index scores of the high-income countries are far better than that of the low-income countries. Currently, the top five countries in the Logistics Index Chart are Germany, Sweden, Belgium, Austria, and Japan. India is currently placed at 44th rank with a score of 3.18. 

For earning a great score in the Logistics Performance Index, it is important to have a strong supply chain like TCS. The logistic services not only ensure smooth delivery to the customers but also play an important role in global trade relations. 

What Does the Logistics Index Chart Indicate?

The score and the rank earned in the Logistics Index Chart can be used to analyze the challenges that a region is facing in the logistic sector along with the opportunities that it presents. Further, the data of the Logistics Index Chart can be used to check how easy or difficult it is for a company to transport general merchandise from one place to another. 

Most of the time, bad performance in the Logistic Performance Index indicates that there is some infrastructure gap in the region as a result of which the efficiency has reduced. Other factors contributing to poor ranking in the chart include lack of skilled power, low predictability and visibility in the supply change. Unnecessary inventory costs can also result in a poor ranking of the region in the Logistics Index Chart. 

In India, the logistic price is still high and therefore, it presents plenty of opportunities for improvement. Reform in the logistic sector of any country can result in improved economic growth. 

Performance Of Other States In Logistics Performance Index

21 states were analyzed for the Logistics Performance Index. The second rank was earned by Haryana, followed by Punjab and Tamil Nadu. Jammu and Kashmir topped the chart in the Northeastern states and Himalayan Union Territories category. Amongst all the union territories, Delhi topped the list. 

The first Logistics Performance Index was released in 2018. However, last year the rank for the same was not released due to Covid-19. The ranking of the Logistics Performance Index in India is used to know the logistic efficiency of different states and further, it identifies the problems in the logistic sector in the states. Once the problem for the same is identified, appropriate policies are designed to improve the problem. Improvement in the logistic sector can be used for improving the logistic performance of different states. It is important to focus on the logistics performance as it throws light on the trade efficiency of the country along with identifying the problem areas, the transaction costs can be reduced too. 

Can The Logistic Sector In India Be Improved?

For improving the efficiency of the logistic sector in India, it is important for the government to take care of multiple fragmented stakeholders to reduce logistic costs. This will further improve the supply chain on a huge scale. Narendra Modi, Prime Minister of India recently while commenting on Aatmanirbhar Bharat has said that a robust logistics sector is extremely important for building a self-reliant India. 

An improved logistic sector can result in cost-effective and sustainable economic growth in the country. It is important to focus on both short and long-term goals for the same while taking into account the policymakers and the private stakeholders to improve the ranking of India on the international platform.