In a development that’s set to reshape global perceptions of India’s logistics landscape, a landmark report jointly prepared by the National Council of Applied Economic Research (NCAER) and the Department for Promotion of Industry and Internal Trade (DPIIT) has pegged India’s logistics cost for FY 2023–24 at ₹24.01 lakh crore, equivalent to 7.97% of GDP and 9.09% of non-services output.
This marks a significant departure from the long-held perception that India’s logistics cost stood at 13–14% of GDP. By employing a rigorous, hybrid methodology combining secondary data with extensive primary surveys across more than 500 industry users and 3,000 service providers, the report delivers the first truly data-driven and globally comparable assessment of India’s logistics cost.
The study was anchored on the “Framework for the Assessment of Logistics Cost in India,” jointly developed by industry, academia, and government, ensuring credibility and objectivity.
Key Highlights of the Report
- Comprehensive Benchmark: Logistics cost estimated at ₹24.01 lakh crore (7.97% of GDP), establishing a robust benchmark for global comparisons.
- Hybrid Methodology: Integrates national accounts, trade data, and large-scale surveys, making the framework globally replicable.
- Multi-Metric Approach: Costs expressed as % of GDP, per tonne per kilometer (PTPK), and % of non-services output for more reliable global benchmarking.
- Firm Size Dynamics: Costs are higher for small firms (16.9% of output) versus large firms (7.6%), underscoring the need for scale-enabling ecosystems.
- Transport Mode Efficiency: Rail (₹1.96/PTPK) and coastal shipping (₹1.80/PTPK) emerged as most efficient; road (₹3.78/PTPK) and air (₹72/PTPK) were significantly costlier.
- Regional Disparities: Northeast-bound cargo faces the highest costs due to infrastructure gaps, while western industrial hubs enjoy efficiencies.
- Warehousing Insights: Costs average ₹30/sq.ft/month, nearly doubling for cold storage (₹58.5), highlighting scope for technology adoption.
- Multimodal Break-even: Railroad multimodal solutions become cost-efficient beyond ~600 km.
- EXIM Cost Focus: Export-import logistics continue to suffer from high port handling and documentation charges.
- Policy Roadmap: Calls for dedicated freight corridors, multimodal logistics parks, deeper waterways, greener logistics, and digitization for future efficiency gains.
Global Reference Point
The report not only corrects inflated assumptions about India’s logistics costs but also creates a global reference framework for logistics cost assessment, offering policymakers, businesses, and international observers a reliable tool for benchmarking.
With initiatives like the National Logistics Policy 2022, PM Gati Shakti, and ULIP already underway, the findings will help India chart a more precise roadmap to reduce logistics costs further and enhance trade competitiveness.
