Beyond Numbers: What Single-Digit Logistics Cost Means for India’s Global Competitiveness
Logistics in India are rapidly growing into the backbone of India's ability to compete successfully in the global economy. With increased trade volumes and increasingly complex supply chain networks; logistics effectiveness empowers more economic growth than restricts it. The latest data analysis shows that there is a fundamental change happening in the way that logistics costs are measured and handled based on ongoing infrastructure improvements and increased use of technology. This change is not just about improving appropriate headline figures; it reflects the deeper structural reform of India’s economy, alignment of national policies related to logistics, and India’s increasing position in the global supply chain.
Atanu Manna, Sr. Manager – Operations & Planning, NLDSL
Changing the metric: Estimations → Evidence
For too long, logistics costs were viewed on a broad level of estimates. The DPIIT/NCAER report and some past studies give much clearer and more exact figures. In 2023-24, logistics costs in India will be about 7.97% of GDP; this puts India into the range of competitive economies worldwide. The compression of the logistics-cost metric reassured all concerned: investors, decision makers and industries leaders.
A boost to Economic Growth through National Transportation Systems
Infrastructure and consistent investment in India have been essential in creating improved performance in logistics. With investments in infrastructure via numerous government-led programmes, including PM Gati Shakti National Master Plan; rapid expansion of the Expressway network; continuously growing freight corridor; and introduction of technology platforms (e.g., Unified Logistics Interface Platform ; the efficiency and performance of freight movement across India are improving significantly. Collectively, these new initiatives will provide consumers with greater speed; predictability; and efficiency while turning infrastructure plans into tangible results.
Increasing India’s Infrastructure into the Global Logistics Environment A logistics cost of less than ten percent of GDP indicates not only efficient operations but, more
importantly, that India is beginning to utilise global benchmarks for logistics performance and the positioning of various organisations within the global logistics environment. Given the current level of logistics costs compared to China; and improving as compared to United States and European benchmarks, India’s positioning in relation to its overall competitive economy is beginning to strengthen. As such, India’s increased competitiveness will lead to improvements in its export performance; the level of integration into the global value chain; and an increase in the amount of foreign direct investment received.
Total Inclusiveness in Efficiency Across All Parts of Ecosystem
As logistics systems grow in capability and size, efficiencies can be achieved in many sectors and in all regions. Improved connectivity between production centres and consumption markets, and also improved connectivity to export gateways will enhance the ability of businesses of all types to more effectively connect with national and international markets. This broader, more ubiquitous affect will support India’s inclusive growth vision, where the role of logistics is to facilitate opportunity, instead of being a restriction.
Enabling a Smarter Supply Chain through Technology and Transparency Digitized logistics, with integrated data systems and access to real-time data visibility, are key to improving logistics in the country. With better access to data, stakeholders can develop enhanced planning criteria, coordinate more efficiently, and respond dynamically to variations in demand for logistics services. The governmental initiatives directly lead by NICDC Logistics Data Services (NLDS) in digitizing the movement of goods and data in real-time, are key enablers for the move to a data- centric logistics environment.
The Unified Logistics Interface Platform (ULIP) provides a secure platform where both public and private sector logistics providers can integrate their digital systems using API's that allow them to communicate with each other. By providing an integration layer that removes the barriers
associated with data silos and lack of interoperability, ULIP allows for much faster decision-making, enhanced coordination, and increased visibility across all the components of the logistics value chain.
The Logistics Data Bank (LDB) also runs parallel with this effort, providing an almost real-time view of the movement of EXIM containers through tracking via RFID at each port, terminal, ICD and CFS location. The ability to have visibility into how long cargo will be moving enables all stakeholders in logistics to better plan for the movement of cargo, resulting in improved predictability for both operational planning and optimization of logistics costs.
India’s transition to a single-digit logistics cost is a historic milestone in its economic development. With firm data and forward-thinking policies driving the expansion of infrastructure and digitization, the logistics ecosystem is becoming more established and capable with confidence and alignment with international standards. Continued performance improvement will be a distinguishing strength of its logistics systems, supporting India’s status as a competitive, dependable, and future-ready global player.
By Atanu Manna, Sr. Manager – Operations & Planning, NLDSL
