Once synonymous with delays, paperwork, and fragmented trucking, India’s $215 billion logistics sector is undergoing a sweeping transformation driven by technology, policy reforms, and global supply chain realignments.
The sector, projected to grow at 10.7% annually until 2026, is being reshaped by new-age logistics startups, digital innovations, and multinational manufacturers localizing their operations in India.
According to a recent report by the Department for Promotion of Industry and Internal Trade (DPIIT), India’s total logistics costs (TLC) are now estimated at 7.97% of GDP and 9.09% of non-services output in FY 2023, significantly lower than earlier estimates of 13–14%. The reduction reflects the early impact of systemic reforms such as the National Logistics Policy (NLP) and PM Gati Shakti, which aim to build an integrated, multimodal logistics ecosystem.
At the heart of this transformation lies a shift toward asset-light and technology-first models. Instead of owning large fleets or warehouses, companies now lease vehicles, engage gig partners, and rely on AI-driven third-party logistics platforms. Artificial intelligence (AI), Internet of Things (IoT), robotics, and drones are increasingly redefining logistics operations — from predictive analytics and real-time fleet monitoring to automated warehouse management.
A key digital enabler is the Unified Logistics Interface Platform (ULIP), which provides real-time access to datasets across multiple ministries, helping optimize logistics costs and turnaround times.
The sector’s rapid modernization is also being propelled by three key forces — e-commerce growth, global manufacturing integration, and cost competitiveness. With same-day and next-day deliveries becoming the norm in cities, and global players like Apple, Tesla, and Foxconn demanding just-in-time logistics, operational efficiency has become a strategic necessity.
India ranked 38th in the World Bank’s 2023 Logistics Performance Index (score 3.4), behind China (19th) and Malaysia (26th). The government aims to secure a top 25 global ranking by 2030.
However, challenges remain. Land acquisition delays, skill shortages, and a fragmented base of small operators with limited digital capacity continue to impede full-scale transformation. Compounding the challenge, the recent U.S. decision to impose a 50% tariff on Indian goods—the highest in Asia—could disrupt “China+1” diversification momentum.
Despite these headwinds, India’s logistics modernization marks a structural leap rather than a mere incremental upgrade. By blending technology, policy support, and global integration, the sector is evolving from a cost center into a strategic pillar of competitiveness in India’s economic ascent.
As automation deepens and multimodal infrastructure synchronizes, India’s long-criticised logistics system is fast emerging as one of the country’s strongest economic assets.
