India Eyes Logistics Transformation Through Smart Infrastructure
India is laying the groundwork for an ambitious transformation of its logistics ecosystem, as it sets its sights on becoming a $30 trillion economy by 2047. The strategy hinges on reimagining infrastructure development to create a smart, interconnected logistics network that can dramatically reduce transport costs, enhance supply chain efficiency, and support a sustainable and equitable economic growth model.
Currently, the nation’s freight logistics remains heavily skewed towards road transport, which accounts for nearly 60% of cargo movement. This model, while critical for last-mile connectivity, remains economically and environmentally inefficient for long-haul freight. Rail, which is inherently safer and more cost-effective for bulk goods, carries just 25% of total cargo. Inland waterways, though offering vast untapped potential, remain grossly underutilised.
As a result, logistics costs in India stand at a staggering 14–18% of GDP—almost double that of developed economies. This inefficiency continues to be a drag on manufacturing competitiveness and export agility.In response, the government is driving a policy and infrastructure overhaul anchored by the PM Gati Shakti National Master Plan, which envisions multimodal logistics planning across road, rail, port, and air networks on a single digital platform. For the first time, national infrastructure planning is being executed in a coordinated, data-backed manner, minimising overlap, and enabling targeted investments where they are needed most.
Indian Railways, one of the largest players in the transformation, has accelerated capacity expansion along high-density corridors since 2014. Strategic projects linking ports, manufacturing clusters, and mining belts have been fast-tracked. The commissioning of Dedicated Freight Corridors (DFCs) on both the eastern and western routes is already delivering results, improving freight speeds and freeing up existing tracks for faster passenger train movement.
Simultaneously, multi-modal logistics parks are being developed to serve as integrated hubs for road, rail, and port connectivity. These centres are envisioned as the future-ready logistics engines of the economy—cutting down cargo handling times, optimising warehousing, and streamlining inventory flow. Their smart-city-like design incorporates digital freight tracking, automated customs processes, and climate-resilient infrastructure.
Technology, too, is reshaping logistics. Artificial Intelligence now predicts freight flows, Blockchain is transforming cross-border documentation, and GPS-based cargo tracking is standardising visibility and accountability across the value chain. Digitisation is no longer a choice—it is the backbone of efficient, sustainable logistics.
However, the shift is not just about concrete and code. Human capital and governance reform are equally vital. A skilled logistics workforce, uniform rules across states, and faster digital approvals are necessary to maintain momentum. The GST-enabled e-Way bill system has set a strong precedent, but future gains will depend on consistency in execution across the logistics value chain.The government’s stated goal is to bring logistics costs down to 12% of GDP by 2030, and align with global standards of 8% or less by 2040. Achieving this will not only reduce operational costs for businesses, but also support exports, improve the ease of doing business, and enable inclusive employment generation in Tier-II and Tier-III cities.
As India charts its path towards its centennial economic vision, logistics infrastructure will be the foundation. But to truly realise this future, the infrastructure must be smart, sustainable, and synchronised. The tracks of tomorrow are already being laid today—and they are steering India in the right direction.
