Piyush Goyal Launches First Scientific Report on India’s Logistics Costs

 Marking the 10th anniversary of the “Make in India” initiative, Union Minister of Commerce and Industry, Shri Piyush Goyal, launched the Report on Assessment of Logistics Cost in India, providing the country with its first comprehensive, scientific estimate of logistics costs. The report has been prepared by the National Council of Applied Economic Research (NCAER) for the Department for Promotion of Industry and Internal Trade (DPIIT), following the mandate of the National Logistics Policy (2022) to create a uniform framework for measuring logistics costs.

A Milestone for Policy and Global Benchmarking

For decades, India’s logistics cost estimates were derived from external studies or partial datasets, often quoted at 13–14% of GDP, creating confusion among policymakers and global stakeholders. For the first time, India now has an evidence-based, hybrid assessment using secondary data combined with nationwide surveys.

According to the report, logistics costs in India are now estimated at 7.97% of GDP, a figure that not only corrects past misrepresentations but also benchmarks India’s competitiveness against global standards.

The report captures logistics costs across transport modes, product categories, and firm sizes, while also estimating freight cost per tonne-kilometre. It highlights how multi-modality in transport can play a transformative role in driving efficiency and lowering costs.

Reforms Driving Competitiveness

Shri Goyal stressed that the government has undertaken wide-ranging reforms to make India’s logistics sector more competitive and to reduce the cost of doing business, including:

• Mapping Harmonized System of Nomenclature (HSN) codes to respective ministries for improved coordination.

• National Logistics Data Bank to track and optimize performance.

• Integrated state and city logistics plans under the SMILE programme, with support from the Asian Development Bank (ADB).

• Infrastructure expansion under major national programmes such as:

  • PM GatiShakti National Master Plan.

  • Dedicated Freight Corridors.

  • Bharatmala Pariyojana (road connectivity).

  • Sagarmala Project (port-led development).

  • Integrated Check Posts for trade facilitation.

• Unified Logistics Interface Platform (ULIP) and the Logistics Efficiency Enhancement Programme (LEAP) to digitize, integrate, and streamline logistics systems.

• GST implementation and rationalization, reducing inefficiencies and enhancing supply chain fluidity.

Evidence of Improvement

The report indicates that while logistics costs remain substantial, the growth rate of logistics costs has slowed relative to the growth in non-services output over the past five years. This suggests that reforms and investments are already yielding results in terms of efficiency gains.

Shri Goyal noted that these structural reforms, combined with continued emphasis on technology integration, are vital for ease of doing business and positioning India as a global logistics hub.

Strategic Importance for Trade and FTAs

The Minister emphasized that accurate logistics cost data is essential not just for internal reforms but also for strengthening India’s position in Free Trade Agreement (FTA) negotiations. With robust data and methodologies, India can better demonstrate competitiveness, negotiate terms, and plan strategic investments in global supply chains.

The Road Ahead

The release of this report provides policymakers, industry leaders, and researchers with a scientifically validated framework for future decision-making. It enables India to identify inefficiencies, target investments, and build infrastructure that supports the vision of Atmanirbhar Bharat while promoting global integration.

The findings are expected to guide future measures to bring logistics costs further down, closer to the global benchmark of 6–8% of GDP, thereby boosting India’s manufacturing competitiveness and trade performance.

The report also reflects the integrated approach of Make in India, GatiShakti, and the National Logistics Policy, reinforcing India’s commitment to transforming its logistics ecosystem as a driver of economic growth.

📑 Full Report — Assessment of Logistics Cost in India: Read Here