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Budget 2022 has hopes pinned on incentives and support reforms for recovery of the Logistics industry

Logistics sector's expectations from Budget 2022
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The Union Budget 2022-23 will be announced early next month by Minister of Finance, Smt. Nirmala Sitharaman and the logistics industry have been expecting support reforms along with incentives to help speed up the industry recovery and further push the signs of encouragement. 

The sector had reported a sequential growth of 9% in Q4FY2021, according to ICRA and as per the Logistics Skill Council, the sector contributes 14.4% to the country’s GDP. 

There is a combined roar for the concrete National Logistics Policy to take effect to develop an integrated logistical ecosystem – essential to realize the Prime Ministers’ dream of making India a USD 5 Trillion economy. 

There is a huge competitive gap when it comes to the logistics cost of India, and the industry wants the Union Budget to help narrow this gap.

Mr. Prem Kishan Gupta, Chairman, and Managing Director, Gateway Distriparks is of the view that along with the need for digitization of the supply chain that focuses on new technologies, there is also an utmost need for policy support and tax relaxations to the sector to increase the ease of doing business.

He said, “With the Union Budget 2022 set to be announced, we expect the government to focus on investing in infrastructure that will allow for the total cost of logistics to reduce for the end customer. With some sections of the Western Dedicated Freight Corridor already operational, we look forward to the entire corridor being completed connecting NCR and major maritime ports viz., Mundra, Pipavav, and Nhava Sheva this year and continue its focus on improving infrastructure by prioritizing other corridors like the North-South, East-West as well as the East-South and West South for uninterrupted rail movement of freight trains to facilitate domestic cargo movement. This will enable the logistics industry to keep moving ahead.” 

Mr. Dhruvil Sanghvi, Founder, and CEO of, LogiNext who wants the Union Budget to focus on start-up ventures and infrastructure building while expressing his expectations from the upcoming budget said, “India saw a euphoric rise in the number of unicorns in 2021, adding 33 in a year making it one of the fastest-growing technology startup ecosystems globally. This growth has been on the back of overall improvement in ease of doing business, and this should continue to remain an ongoing focus and priority. Within the logistics space, there has been a massive disruption led by a major increase in last-mile deliveries. Additionally, as Make-in-India along with the national freight corridors gains momentum, this is going to further increase demand for logistics. All of this necessitates building future-ready infrastructure capabilities. We can achieve this with the right focus on digitizing processes and making international trade easier, which would go a long way in elevating India’s position in the global technology and logistics arena.” 

Mr. Bhavik Chinai, Group CEO, BVC Logistics (providing secure logistics for diamond and jewelry value chain), hopes the government gives a thought on simplification of EXIM activity to yield benefits for the Industry. 

“We expect the Union Budget to provide large incentives for jewelry exporters for exporting <$1000 shipments which will boost e-commerce & could make India a global leader in jewelry, like in diamonds. A higher interest rate in the Gold Monetization Scheme will lead to improved Indian BOP & employment in the jewelry sector. We are hoping for a higher budget for new airports, tax benefits for logistics Capex & simplification of procedures for new exporters through a single-window between DGFT, Customs & GST will unquestionably help the e-commerce & logistics industries,” Chinai said.

A firm believer of the self-reliant ideology, Mr. Lancy Barboza, Managing Director, Flomic Global Logistics, believes that the next step is to become self-sufficient and promote various growth aspects of the logistics industry on the idea of Make in India. He is also a supporter of the digitization of the industry to become efficient and effective in operations.

He said, “The Government should come up with a Policy Document that will encourage large private companies to own and operate Ocean and Air Shipping Lines out of India. Since these are highly capital intensive and complex business operations the Govt. of India should play the role of a facilitator and extend all possible help to private corporates to set up Shipping Lines and Airlines. As a part of “Make in India” the Government of India should offer all possible incentives and tax breaks to those who are manufacturing containers in India. Containerisation should be encouraged for domestic cargo movements which will revolutionize the cargo movement within the country resulting in faster turnaround of vehicles reducing dwell time and eliminating damage and pilferage of cargo. To reduce the dwell time of cargo at ports, automation and mechanization of cargo handling should be increased. So industries that manufacture cargo handling and lifting equipment should be given special concessions and interest subsidies. The government of India is promoting the use of solar energy in a big way. Extending these further cold storage warehouses run on solar energy should be given incentives and subsidies. This will help better utilization of farm and dairy products and increase the yield of farmers and at the same time, it is environment friendly too.”

Many stakeholders also expressed their eagerness to see the National Logistics Policy come to effect at the earliest.

“We have high hopes from the government for the upcoming Budget. That said, we feel that there’s a need to bring all energies and fuels under GST which will further reduce the variations across states and reduce the cost of Fuel. As a Logistics player, we are also expecting a CGMST expansion to startups to provide a reduced cost working capital. For integrated logistics, we are also looking forward to a comprehensive National Logistics Policy along with Gati Shakti Program .” 

Prasad Sreeram, Founder and CEO, COGOS Technologies

“Keeping the resilience that the logistics sector showcased in the last year, the upcoming Budget is one to look out for. Logistics is the proverbial growth engine of the economy and making it cost-effective through newer reforms will be a much-appreciated boon. A comprehensive National Logistics Policy is what we are looking forward to as its swift implementation will further boost the sector. A strong regulatory push for electric commercial vehicles would also be a welcome move. Additionally, the Union Budget may provide subsidies for using EVs for commercial & logistics purposes, incentives for supplies of essentials & food products, and reduction in excise duty on diesel.”

Pushkar Singh, CEO & Co-Founder, LetsTransport

To summarize, apart from the National Logistics Policy, the stakeholders are expecting the Union Budget 2022-23 to address the issues around industry-focused SOPs, glitches in the application of GST, sustainable operations & green logistics, and better incentives & policies to increase the ease of doing business.

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