India’s logistics Costs Estimated at 7.97% of GDP

On 20th September 2025, in celebration of a decade of the “Make in India” initiative, Union Commerce & Industry Minister Piyush Goyal launched India’s first comprehensive report on logistics costs. For the first time, the country now possesses an officially derived estimate—7.97% of GDP—based on a hybrid methodology combining secondary data with large-scale nationwide surveys. This milestone strengthens data-driven policy-making and supports the broader mission of turning India into a competitive global logistics hub.

Key Highlights of the Report

• Precise Estimate: India’s logistics cost is now officially pegged at 7.97% of GDP, replacing outdated and inflated figures of 13–14%.
• Scientific Methodology: The report uses hybrid data analysis, including firm-level and sector-specific surveys across multimodal networks.
• Freight Metrics: It includes cost-per-tonne-km and multi-modal performance indicators across firm sizes and sectors.
• Growth Trend: The growth rate of logistics costs is slowing relative to growth in output, suggesting improving efficiency.

Policy and Institutional Measures

• HS Code Mapping: Each Harmonized System (HS) code is linked to a nodal ministry to boost coordination and global trade negotiation.
• SMILE Programme: State and city logistics plans are being implemented with support from ADB to streamline infrastructure development.
• ULIP & NICDC: Unified Logistics Interface Platform (ULIP) and projects led by NICDC are digitizing logistics flows and reducing procedural delays.
• GST Reform Impact: The rationalization of tax structures has enabled cross-border logistics efficiency and faster goods movement.

Strategic Infrastructure & Investments

• GatiShakti Master Plan: Integrated infrastructure projects like Bharatmala, Sagarmala, and Dedicated Freight Corridors are key contributors.
• Reduced Turnaround Time: Ship turnaround time has dropped from two days (pre-2014) to less than one day.
• Upcoming Projects: Deep-sea ports like Vadhavan and inland waterway upgrades are being developed to support large-volume, low-cost transport.

Static Facts

• Logistics Cost (official): 7.97% of GDP
• Previous informal estimates: 13–14%
• Survey Reference Year: FY 2021–22
• Policy Base: National Logistics Policy (2022)
• Key Platforms: ULIP, NICDC, SMILE