In order to be competitive, the country will need to reduce its logistics costs, said Nitin Gadkari. Addressing the 63rd Annual SIAM Convention, the Union Minister for Road, Transport and Highways assured that in the coming three years, the logistics costs would be reduced to a single digit of 9%, enabling further ease in exports for the automotive industry, and increase competitiveness in the world market.
Currently, the logistics costs in India are between 14 to 16%, whereas in China it is 8-10% and in Europe it is 12%.
In 2022, Prime Minister Narendra Modi had launched the National Logistics Policy, stating that reduction in logistics costs was vital to improving the competitiveness of Indian goods, both in domestic and export markets.
He had reiterated that schemes like Sagarmala and Bharatmala expedited the work of Dedicated Freight Corridors to improve logistics connectivity for systematic infrastructure development.
The automotive industry is a major driver of the global logistics market and the Indian logistics industry, which currently stands at about US$ 15 billion and is expected to grow at a CAGR of 10–12% in the coming years. A surge in e-commerce, infrastructure development, and the increasing importance of supply chain management, is slated to bolster the growth of the Indian logistics industry.