Reinventing the Logistics Landscape in India

India’s logistics sector is undergoing a major transformation driven by initiatives such as  PM Gati Shakti master plan National Logistics Policy, and Dedicated Freight Corridors, aiming to reduce logistics costs and enhance trade efficiency.

About Transformation of India’s Logistics Sector:

Overview of the Indian Logistics Sector:

• India’s logistics sector, once fragmented and cost-intensive, is now evolving into a digitally integrated and multimodal network.
• Valued at USD 215 billion in 2021, it connects agriculture, manufacturing, retail, and e-commerce through transportation, warehousing, and supply chain management.
• The government’s infrastructure push and digital reforms have made India a rising logistics hub in Asia.
• The sector employs over 22 million people and contributes nearly 14% of GDP, underscoring its central role in economic resilience.

Economic Importance of the Logistics Sector:

• Trade Competitiveness: Efficient logistics can reduce export costs, improving India’s position in global value chains.
• GDP Growth Engine: A 1% reduction in logistics costs can potentially boost GDP by 2%.
• Employment Generation: Creates large-scale jobs in transport, warehousing, and IT-enabled supply chain services.
• Regional Development: Enhances rural–urban connectivity, stimulating industrial growth in Tier-II and Tier-III cities.
• Revenue Growth: Improved logistics efficiency increases tax revenues through higher trade and manufacturing activity.

Initiatives Taken So Far:

1. National Logistics Policy (2022): Targets logistics cost reduction from 14–16% to single digits through digital and infrastructure reforms.
2. PM Gati Shakti Master Plan (2021): Integrates 57 ministries and 36 states on a 1,700-layer GIS platform for unified infrastructure planning.
3. Dedicated Freight Corridors: Eastern and Western corridors now 96% operational, decongesting rail routes and cutting transit time.
4. Multimodal Logistics Parks: 35 parks approved across India to promote warehousing and last-mile efficiency.
5. Digital Platforms: Launch of ULIP and Logistics Data Bank for real-time cargo tracking and data integration.