Logistics have 8% Share in
GDP
·
Decade of Make in India: Government unveils
comprehensive logistics cost assessment to boost competitiveness
Union
Commerce and Industry Minister Piyush Goyal on 20 September 2025 released a
first-of-its-kind report on India’s logistics cost assessment in New Delhi,
marking a decade of Make in India.
Prepared by NCAER for DPIIT, the study estimates logistics costs at 7.97% of
GDP, replacing earlier inconsistent figures of 13–14%.
The
report, mandated under the National Logistics Policy (2022), uses a
hybrid methodology combining secondary data with nationwide surveys. It
captures costs across modes, product categories, and firm sizes, and benchmarks
India against global practices.
Mr. Goyal
noted that initiatives such as PM GatiShakti, Dedicated Freight Corridors,
Bharatmala, Sagarmala, ULIP, LEAP, and integrated state logistics plans are
reducing inefficiencies and slowing the growth rate of logistics costs. He
highlighted reforms like GST rationalization, logistics databank creation,
and HSN code–ministry mapping that strengthen India’s trade competitiveness
and FTA negotiations.
By
providing a uniform, evidence-based framework, the report will guide
policy, strengthen multimodal efficiency, and support India’s vision of
becoming a global logistics hub.
On
the occasion of celebrations marking a decade of “Make in India,” the Union Minister
of Commerce and Industry, Piyush Goyal, on 20 September, 2025 in New Delhi launched
the report on Assessment of Logistics Cost in India. For the first time, India will
have a comprehensive and scientifically derived estimate of logistics costs, using
a hybrid methodology that combines secondary data with nationwide surveys. This
initiative follows the mandate of the National Logistics Policy (2022) to establish
a uniform framework for measuring logistics costs and benchmarking them against
global practices.
Mr.
Goyal highlighted that the Government has undertaken multiple initiatives to make
logistics more competitive and reduce the cost of doing business in India. He noted
that studies and reports prepared by the Industry and Commerce Departments are helping
identify key issues in logistics costs. Efforts such as mapping each Harmonized
System of Nomenclature (HSN) code to the respective line ministry streamline coordination
and strengthen India’s position in free trade agreement (FTA) negotiations. He further
emphasized that the creation of a logistics data bank, the implementation of integrated
state and city logistics plans under the SMILE programme in collaboration with ADB,
and infrastructure projects spearheaded by NICDC and other agencies aim to assess
available facilities, improve transport and connectivity, and reduce inefficiencies.
These measures, along with reforms such as GST implementation and rationalization,
are central to ongoing efforts to reduce logistics costs, enhance ease of doing
business, and boost competitiveness.
Until
now, logistics costs in India were often misrepresented, with commonly cited figures
of 13–14% of GDP derived from external studies or partial datasets. This led to
inconsistent estimates, causing confusion among policymakers and global stakeholders.
As per the current assessment prepared by NCAER for DPIIT, logistics costs in India
are estimated at about 7.97% of total GDP.
The
report provides a comprehensive framework by capturing logistics costs across different
transport modes, product categories, and firm sizes. It also presents estimates
of freight cost per tonne-kilometre and highlights the role of multi-modality in
enhancing efficiency. By providing evidence-based guidance, the study strengthens
India’s efforts to improve competitiveness and supports the broader vision of positioning
the country as a global logistics hub.
Estimates
for the previous five years show that the growth rate of logistics costs is gradually
slowing compared with the pace of growth in non-services output. This improvement
can be attributed to initiatives such as the PM GatiShakti National Master Plan,
Dedicated Freight Corridors, BharatmalaPariyojana, Sagarmala Project, Integrated
Check Posts, development of the Unified Logistics Interface Platform (ULIP), and
the Logistics Efficiency Enhancement Programme (LEAP), among others.
Release
of Report of "Assessment of Logistics Cost in India": https://drive.google.com/file/d/1w2Pyd2rzCiJ_GZijUxHZmoPuKdSqzgPc/view?usp=drive_link