India’s logistics costs are estimated at 7.97 per cent of the country’s Gross Domestic Product (GDP) in 2023-24, according to a report prepared by the National Council of Applied Economic Research (NCAER) for the Department for Promotion of Industry and Internal Trade (DPIIT).
The report, titled Assessment of Logistics Cost in India, was launched last week by Commerce and Industry Minister Piyush Goyal, providing the country with a scientifically derived and comprehensive estimate of logistics costs across transport modes, product categories, and firm sizes.
Earlier estimates, often cited at 13-14% of GDP, were based on external studies or partial datasets, leading to inconsistent figures and confusion among policymakers and global stakeholders. The new study provides a more accurate and data-driven framework for assessing logistics efficiency in India.
The report highlights that the pace of growth in logistics costs has gradually slowed over the past five years, a trend attributed to initiatives such as the PM Gati Shakti National Master Plan, dedicated freight corridors, the Sagarmala project, integrated check posts, and the unified logistics interface platform.
Key Findings:
Rail logistics emerges as the most cost-efficient mode, with an average cost of Rs 1.96 per tonne per km, excluding first/last mile delivery.
Road transport averages Rs 11.03 per tonne per km, while air freight remains the fastest but costliest option at Rs 72 per tonne per km, primarily used for high-value, time-sensitive goods.
The report also provides freight cost per tonne-kilometre and emphasizes the importance of multi-modal transportation in improving efficiency.
On a global scale, logistics costs in Indonesia were relatively high at 24% of GDP, while South Korea recorded around 8%, and China estimated 14.4% of GDP for logistics costs in 2023.
This data is expected to help policymakers, businesses, and international investors make more informed decisions and support India’s ambition to develop a highly efficient and cost-effective logistics ecosystem.
