By Martin Shwenk Leade
Copyright indiatimes
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India’s logistics cost in 2023-24 totalled an estimated 7.97% of its gross domestic product (GDP), with rail logistics emerging as a cost-efficient mode with an average cost of ₹1.96 per tonne per km, significantly lower than road transport (₹11.03), the Department for Promotion of Industry and Internal Trade said in a report.Air transportation was the most expensive, albeit the fastest, mode of freight transportation, averaging ₹72 per tonne per km, which largely limited its use to high-value, time-sensitive commodities.The report titled ‘The Assessment of Logistics Cost in India’, was prepared by the National Council of Applied Economic Research for the department. It represents the country’s first scientifically derived estimate using a hybrid methodology combining secondary data with nationwide surveys.”This study estimates the logistics cost to be 7.97% of GDP and 9.09% of non-services (agriculture, mining, and manufacturing) output, the latter metric being a better measure to track logistics costs, and to make sub-national and international comparisons,” the report said, adding that transportation cost was the largest component of logistics cost.The aggregate logistics cost is estimated at ₹24.01 lakh crore at 2023-24 prices derived from secondary data sources including the Reserve Bank of India’s balance of payments statements. The commerce and industry ministry said, “Until now, logistics costs in India were often misrepresented, with commonly cited figures of 13-14% of GDP derived from external studies or partial datasets. This led to inconsistent estimates, causing confusion among policymakers and global stakeholders.”Live EventsThe estimates derived for the previous five years showed that the pace of growth in the logistics cost was gradually slowing, it said, attributing it to several initiatives such as PM Gati Shakti National Master Plan, dedicated freight corridors, Sagarmala project, integrated check posts and development of the unified logistics interface platform.The report provides a comprehensive framework by capturing logistics costs across different transport modes, product categories and firm sizes.The report recommended use of dedicated freight corridors to reduce congestion, upgradation and modernisation of railway infrastructure, technological innovation including GPS tracking and automation for safety and security, and loading and unloading of cargo. It also proposed adoption of green energy and fuel-efficient vehicles, dedicated truck lanes and freight consolidation centres, multi-modal logistics parks, modern cargo-friendly airports in non-metro cities, deeper and wider navigation channels to ensure continuous, year-round navigability in the rivers and multi-modal terminals to seamlessly integrate with rail, road and sea transport.The government has launched integrated state and city logistics plans in eight cities across eight states with an aim to cut transaction costs of industry.Add as a Reliable and Trusted News Source Add Now!
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(You can now subscribe to our Economic Times WhatsApp channel)Read More News onIndia logistics costGDPrail logisticsfreight transportationtransport modesNational Council of Applied Economic ResearchReserve Bank of Indiacommerce and industry ministry(Catch all the Business News, Breaking News, Budget 2025 Events and Latest News Updates on The Economic Times.) Subscribe to The Economic Times Prime and read the ET ePaper online….moreless
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