India is set to significantly reduce its logistics costs from the current 14-16% of GDP to 9% within the next two years. This ambitious target is part of the government’s broader strategy to enhance economic competitiveness and position India as a global logistics hub. Union Minister for Road Transport and Highways, Nitin Gadkari, has emphasized that the reduction in logistics costs is crucial for improving India’s export efficiency and overall economic performance.
He highlighted that the current logistics costs are substantially higher compared to global standards, with China at 8% and the United States and European countries at 12%. By addressing this disparity, India aims to bolster its position in the global market. Central to this initiative is the extensive development of infrastructure, including highways and expressways, under the Prime Minister Gati Shakti-National Master Plan (PMGS-NMP). These projects are designed to reduce travel time, enhance connectivity, and streamline the movement of goods across the country. For instance, the construction of green express highways is expected to significantly cut down travel times between major cities, thereby reducing fuel consumption and operational costs for businesses.
The government’s focus on infrastructure development is complemented by policy reforms aimed at improving logistics efficiency. The National Logistics Policy (NLP) and PMGS-NMP are pivotal in creating a unified and efficient logistics ecosystem. These initiatives promote the integration of various modes of transport, standardization of processes, and the adoption of technology to enhance supply chain management. Furthermore, the emphasis on sustainable practices is evident in the promotion of alternative fuels and biofuels. The government is exploring the potential of hydrogen and CNG as viable options for reducing the carbon footprint of the logistics sector. This aligns with India’s commitment to achieving net-zero emissions and fostering a green economy.
The anticipated reduction in logistics costs is expected to have a cascading effect on various sectors of the economy. Lower transportation costs will lead to reduced prices for goods, benefiting consumers and enhancing the competitiveness of Indian products in international markets. Additionally, the improved logistics infrastructure will facilitate the growth of industries such as manufacturing, agriculture, and e-commerce, contributing to job creation and economic development. In conclusion, India’s strategic focus on reducing logistics costs through infrastructure development and policy reforms is poised to transform the logistics landscape. By achieving the target of 9% logistics cost, India aims to enhance its global competitiveness, stimulate economic growth, and pave the way for a sustainable and efficient logistics sector.
Also Read :Pune Expo Redefines Logistics Innovation Drives Sustainable Supply Chains
