According to a new report by the Department for Promotion of Industry and Internal Trade (DPIIT) and the National Council of Applied Economic Research (NCAER), India’s logistics costs were 7.97% of its GDP in the fiscal year 2023-24. This groundbreaking finding challenges the long-held, but often unsubstantiated, belief that the costs were as high as 13-14% of GDP. The new figure, derived from a rigorous and scientific methodology, establishes a much-needed, data-driven benchmark for policymakers and businesses.
This significant reduction in logistics costs can be attributed to several large-scale government reforms and infrastructure development projects. Key initiatives such as the PM Gati Shakti National Master Plan, Dedicated Freight Corridors, the Sagarmala project, and the development of the Unified Logistics Interface Platform (ULIP) have played a crucial role in improving efficiency and lowering costs. These interventions are reshaping India’s logistics landscape, making it more competitive on the global stage.
The report’s findings have far-reaching implications. For policymakers, it provides a reliable basis for future infrastructure investments and supply chain reforms. For private companies, it offers accurate data for better strategic planning and decision-making. By aligning its logistics costs closer to global averages (7-8% in developed nations), India enhances its appeal as a manufacturing and export hub, strengthening its position in global value chains and supporting its ambition of becoming a $5 trillion economy.