India has embarked on a transformative decade-long journey to reduce its notoriously high logistics costs and boost economic competitiveness. Historically, logistics expenses in India ranged between 14% and 18% of GDP—nearly twice the global average of around 8%. This cost burden consistently hampered the country’s manufacturing and export potential. Now, a concerted push by the government, supported by strategic infrastructure and digital reforms, is setting the stage for a more efficient logistics landscape by 2030.
As logistics remains a critical pillar for India’s aspiration to become a global manufacturing hub, the country’s efforts to optimize this sector are gaining traction. The logistics ecosystem is witnessing structural overhauls, multimodal integration, digital unification, and private sector innovation—all aimed at trimming costs, improving efficiency, and enhancing global competitiveness.
Reforms Backed by Visionary Policies
The launch of the National Logistics Policy (NLP) in September 2022 signaled a turning point in India’s logistics reform agenda. The policy laid a strategic foundation with four core pillars: integration of digital systems, Unified Logistics Interface Platform (ULIP), EASE of Logistics (ELOG), and system improvement. Each component targets different inefficiencies within the logistics value chain, promoting data interoperability and transparency.
Additionally, the PM Gati Shakti Master Plan complements the NLP by using a GIS-enabled platform that synchronizes efforts across 16 ministries. This integrated planning approach ensures a unified development of multimodal infrastructure that caters to both freight and passenger logistics needs.
Massive Infrastructure Development Reduces Transit Bottlenecks
Infrastructure development has taken center stage in India’s logistics modernization strategy. The government has made substantial investments in highways, dedicated freight corridors, and port upgrades to tackle transit delays. As a result, port dwell times—the time cargo spends waiting at ports—have fallen from 3.4 days in 2018 to 2.6 days in 2023.
Moreover, dedicated freight corridors (DFCs) are nearing completion and promise to reduce logistics costs by up to 30% on long-haul routes. These corridors not only improve turnaround time but also allow for the faster, more predictable movement of goods across key trade routes.
Digital Integration through ULIP Accelerates Efficiency
The Unified Logistics Interface Platform (ULIP) is central to the digital transformation of India’s logistics sector. It has unified over 30 systems across different departments, creating a single-window digital interface for real-time tracking of cargo.
As a result, shippers and freight operators experience significantly reduced turnaround times and lower transaction costs. With seamless data flow and enhanced visibility, ULIP enables better coordination, smoother customs processes, and quicker delivery cycles.
Private Sector and Startups Drive Technological Disruption
The private sector plays an equally crucial role in India’s logistics cost reduction journey. Startups and third-party logistics providers are deploying technologies such as artificial intelligence and predictive analytics to streamline operations.
These innovations help in optimizing delivery routes, forecasting demand accurately, and automating warehouse functions. In turn, businesses can save on fuel, manpower, and time—further contributing to reduced logistics expenditure.
Looking Ahead: Toward a $500 Billion Logistics Economy
The Indian logistics sector, currently valued at over $310 billion, is projected to exceed $500 billion by 2030. The government’s continued focus on policy reform, infrastructure investment, and digital adoption will play a vital role in sustaining this momentum.
If the country continues on this trajectory, India is well-positioned to reduce logistics costs to single-digit percentages of GDP. This transformation will significantly enhance its competitiveness in global supply chains and cement its role as a key export-driven economy.
