{"id":54782,"date":"2025-09-22T19:15:12","date_gmt":"2025-09-22T13:45:12","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=54782"},"modified":"2025-09-24T13:37:19","modified_gmt":"2025-09-24T08:07:19","slug":"india-logistics-cost-assessment","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/22-09-2025\/india-logistics-cost-assessment","title":{"rendered":"Assessment of Logistics Cost in India"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Union Minister of Commerce and Industry launched the <strong>report on Assessment of Logistics Cost in India.<\/strong><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Prepared by:<\/strong> The Industry and Commerce Departments.<\/li>\n\n\n\n<li><strong>Comprehensive Framework:<\/strong> It provides a comprehensive framework by capturing logistics costs across different transport modes, product categories, and firm sizes.&nbsp;<\/li>\n\n\n\n<li><strong>Aim: <\/strong>It follows the mandate of the<a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/19-09-2022\/national-logistics-policy-2022\" data-type=\"link\" data-id=\"https:\/\/www.nextias.com\/ca\/current-affairs\/19-09-2022\/national-logistics-policy-2022\"> National Logistics Policy (2022) <\/a>to establish a uniform framework for measuring logistics costs and benchmarking them against global practices.<\/li>\n\n\n\n<li><strong>Logistics Cost: <\/strong>As per the current assessment logistics costs in India are estimated at about<strong> 7.97% of total GDP.<\/strong><\/li>\n\n\n\n<li><strong>Previous Estimates:<\/strong> Until now, logistics costs in India were often misrepresented, with commonly cited figures of 13\u201314% of GDP derived from external studies or partial datasets.\n<ul class=\"wp-block-list\">\n<li>This led to inconsistent estimates, causing confusion among policymakers and global stakeholders.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Improvement:<\/strong> Estimates for the previous five years show that the growth rate of logistics costs is gradually slowing compared with the pace of growth in non-services output.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Achievements of India\u2019s Logistics Sector<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Ranking in 2023 Logistics Performance Index (LPI): India was ranked 38th place out of 139 nations, <\/strong>a notable improvement of six places since the last ranking in 2018.&nbsp;<\/li>\n\n\n\n<li><strong>The Inland Waterways Authority of India (IWAI)<\/strong> recorded cargo movement of 145.5 million tonnes in the year 2024\u201325.\n<ul class=\"wp-block-list\">\n<li>The number of operational national waterways has also increased from 24 to 29 during the same period.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#fff2cc\"><tbody><tr><td><strong>Key Objectives of National Logistics Policy (NLP):<\/strong><br>&#8211; To<strong> reduce logistics costs<\/strong> to global benchmarks and to <strong>bring it below 10% of GDP.<\/strong><br>&#8211; To improve India\u2019s ranking in the Logistics Performance Index (LPI) to the <strong>top 25 by 2030.<\/strong><br>&#8211; To establish a <strong>robust, data-driven decision support system <\/strong>to ensure an efficient and integrated logistics ecosystem.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Challenges<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>High Logistics Cost:<\/strong> India\u2019s logistics cost is very high at around 13\u201314% of GDP (as estimated previously), making Indian exports less competitive compared to global peers.<\/li>\n\n\n\n<li><strong>Infrastructure Gaps:<\/strong> The sector suffers from infrastructure gaps in warehousing, cold storage, and last-mile connectivity.<\/li>\n\n\n\n<li><strong>Overdependence on Road:<\/strong> There is an overdependence on road transport, which causes congestion, delays, and higher transportation costs.<\/li>\n\n\n\n<li><strong>Multimodal Transport Issues: <\/strong>The low share of railways and inland waterways in freight transport hampers the development of an efficient multimodal system.<\/li>\n\n\n\n<li><strong>Environmental Concerns: <\/strong>Heavy dependence on diesel-based trucking increases carbon emissions and contributes to environmental pollution.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key Government Initiatives in Logistics<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>PM GatiShakti Master Plan: <\/strong>It was launched in <strong>2021 <\/strong>to integrate different modes of transport into a coordinated network.\n<ul class=\"wp-block-list\">\n<li>It has brought together 57 Central Ministries\/Departments and all 36 states and union territories.&nbsp;<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Maritime Amrit Kaal Vision 2047: <\/strong>It is aligned with blue economy principles, lays out a long-term roadmap to transform India\u2019s maritime sector.\n<ul class=\"wp-block-list\">\n<li>The vision also aims to boost coastal tourism, strengthen maritime skill development, and position India as a global hub for shipbuilding and repair.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Dedicated Freight Corridors: <\/strong>The Ministry of Railways is currently developing two Dedicated Freight Corridors (DFCs).\n<ul class=\"wp-block-list\">\n<li>The objectives of these specialized railway lines are to ease congestion on existing passenger routes, lower transportation costs, and improve energy efficiency.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"e8eef7\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"644\" height=\"674\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/09\/image-115.png\" alt=\"dedicated freight corridors\" class=\"not-transparent wp-image-54783\" style=\"--dominant-color: #e8eef7; width:438px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/09\/image-115.png 644w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/09\/image-115-287x300.png 287w\" sizes=\"auto, (max-width: 644px) 100vw, 644px\" \/><\/figure>\n<\/div>\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Multi-Modal Logistics Park:<\/strong> 35 key locations such as Chennai, Bengaluru, Nagpur, Indore, and others have been approved through both private and public sector efforts for the development of MMLPs. Out of these, 5 are expected to be operational by 2027.<\/li>\n\n\n\n<li><strong>Unified Logistics Interface Platform (ULIP): <\/strong>It is<strong> <\/strong>a digital platform that brings together data from various logistics-related ministries and departments on a single interface; it has recorded 100 crore API transactions in 2025.<\/li>\n\n\n\n<li><strong>Gati Shakti Vishwavidyalaya (GSV): <\/strong>The GSV is<strong> India\u2019s first university<\/strong> dedicated to transport and logistics education.\n<ul class=\"wp-block-list\">\n<li>GSV plays a key role in preparing skilled professionals to support this national goal.&nbsp;<\/li>\n\n\n\n<li>Gati Shakti Vishwavidyalaya has signed Memoranda of Understanding (MoUs) with about 40 different industrial and academic institutions.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Sustainability:<\/strong><strong>The Freight Greenhouse Gas (GHG) Calculator<\/strong> has been developed for calculating and comparing the total cost of transportation and GHG emissions to build awareness and support sustainable development.\n<ul class=\"wp-block-list\">\n<li>The Indian Railways has launched<strong> Rail Green Points<\/strong> for freight customers, allowing them to see potential carbon emission savings.&nbsp;<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.pib.gov.in\/PressReleasePage.aspx?PRID=2168995\" rel=\"nofollow noopener\" target=\"_blank\"><strong>PIB<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">The Union Minister of Commerce and Industry launched the report on Assessment of Logistics Cost in India.<\/li>\n<p><\/p>\n<h3><strong>About<\/strong><\/h3>\n<li class=\"ms-5\">Prepared by: The Industry and Commerce Departments.<\/li>\n<li class=\"ms-5\">Comprehensive Framework: It provides a comprehensive framework by capturing logistics costs across different transport modes, product categories, and firm sizes.\u00a0<\/li>\n<li class=\"ms-5\">Aim: It follows the mandate of the National Logistics Policy (2022) to establish a uniform framework for measuring logistics costs and benchmarking them against global practices.<\/li>\n<li class=\"ms-5\">Logistics Cost: As per the current assessment logistics costs in India are estimated at about 7.97% of total GDP.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/22-09-2025\/india-logistics-cost-assessment\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":54816,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-54782","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/09\/india-logistics-cost-assessment.png","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/54782","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=54782"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/54782\/revisions"}],"predecessor-version":[{"id":55020,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/54782\/revisions\/55020"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media\/54816"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=54782"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=54782"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=54782"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}