Bringing down India’s high logistics costs is essential to improving the country’s global competitiveness, says Vineet Agarwal, Managing Director of Transport Corporation of India.
Speaking to CNBC-TV18, Agarwal highlighted that India’s logistics costs currently stand at 11–13% of GDP, which is significantly higher than in developed countries. “The most important factor is how we reduce logistics costs for the country as a whole. That’s what makes us competitive—not just domestically but also internationally, especially in exports,” he said.
Agarwal pointed out that low rail speeds, inefficient loading and unloading, and delays at factories remain major bottlenecks. “The average speed of rail movement is about 28 kilometres per hour,” he noted, adding that port throughput has improved but still has room to grow. He emphasised the importance of increasing productivity and reducing reliance on cost-intensive road transport.
He also underlined the need for greater standardisation in trucking and packaging. “Today, trucks are not standardised, and even pallets are not. That could go a long way,” Agarwal said. Digitisation, he added, would be another game changer for the sector.
Looking ahead, Agarwal said India’s logistics sector is poised for strong growth, buoyed by structural shifts such as the China+1 strategy, which is moving more manufacturing to India. The sector already employs over 22 million people and typically grows at 1–1.5 times the GDP growth rate.
Transport Corporation of India has embraced a shift towards multimodal logistics as a key strategy. “From virtually zero a few years ago, a third of our revenues now come from multimodal logistics,” Agarwal said. He believes this transition, alongside investments in warehousing, cold chain, and specialised logistics, is critical for driving long-term efficiency and cost reduction.
