India’s Minister of Finance and Corporate Affairs Arun Jaitley announced that the country will launch a national logistics and digital trade platform next year. The National Logistics Portal (NLP) will secure all transport and logistics vendors onto one platform, enabling easier price comparison for clients and companies. As a result, the transport of goods around India, as well as the export process, will be more efficient and bring down overall costs.
According to Business Insider, logistics costs currently account for as much as 14 percent of the nation’s gross domestic product (GDP). The government hopes that the platform will bring that figure down to 10 percent within a few years.
To achieve that, NLP will be utilized as a “one-stop shop” for traders and manufacturers. However, the platform will be more than just a way to connect with logistics service providers. It will also enable them to obtain certification from 81 government entities, including the Ministry of Railways, Sea and Airport Terminal Authority, Ministry of Roads and Highways, and Customs department.
Once the platform wins approval by a committee of secretaries in the Ministry of Commerce and Industry, a bid to create the online platform will be issued in October 2018, with the Union Cabinet approving the company that wins the project. A trial run of the NLP is expected to end by March 2019.
NLP’s development will include a single-window certification device to approve transactions, as well as the integration of an online payment service. In addition, there will be a mobile application so buyers can track their goods in real time.
This platform is one way India is embracing digital technology. Two years ago, India’s prime minister announced plans to become a cashless society in an effort to crack down on the nation’s underground economy, boost tax revenues and encourage the transition to a digital banking infrastructure.
However, cash still remains a key component of the nation’s economy. The limited internet access of India’s large rural population, a distrust of the nation’s financial systems and the population’s cultural ties to “real” money are all factors in cash’s stronghold in the country. Based on current trends, the rate of total cash usage in India is expected to rise at a compound annual growth rate (CAGR) of 10.47 percent from 2016 to 2021.