The Indian government is set to introduce packaging standards requiring warehouses to optimize space utilization to reduce the country’s logistics costs. Logistics costs account for approximately 14-15% of India’s gross domestic product (GDP), considerably higher than the 7-8% observed in advanced economies. The Union Commerce Ministry is developing standards encompassing various aspects such as racking arrangements, lifting, loading, and unloading processes. These regulations will form a national logistics policy (NLP).
The proposed standards will undergo interministerial consultations, with the final rules expected to be implemented before the end of the financial year. The NLP and Prime Minister Gati Shakti initiative aims to integrate different facets of India’s logistics sector and reduce costs to 8% of GDP within five years. This reduction in logistics expenses is crucial for enhancing competitiveness domestically and globally.
The absence of uniform packaging standards has led to underutilization and higher operational costs in many modern warehouses. Additionally, transporters need help loading goods to their total capacity, causing supply chain disruptions and shortages. Truckers often charge clients for the entire capacity of their vehicles, even when not fully loaded, due to the need for standardized packaging, leading to idle freight spaces.
Implementing uniform packaging standards is expected to address these issues and significantly reduce costs. According to the India Brand Equity Foundation, the warehousing, industrial, and logistics sectors play a critical role in achieving India’s target of becoming a $5 trillion economy by FY25. The government’s move has been praised by industry experts, including logistics, storage, and e-commerce firms, who believe that standardization will improve efficiency and reduce expenses.
Vikas Choudaha, Senior Vice President and Business Head of Godrej Storage Solutions highlighted the importance of harmonizing packaging, labeling, container standards, process standardization, and ICT standardization to tackle the existing challenges in the sector.
Introducing these packaging standards will enhance operations, lower costs, and support India’s ambitious economic goals
