India’s Logistics Cost Estimated at 7.97% of GDP: DPIIT Report

New Delhi, Sep 26 (KNN) India’s logistics cost is estimated at 7.97 per cent of the country’s Gross Domestic Product (GDP) for 2023-24, according to a new report released by the Department for Promotion of Industry and Internal Trade (DPIIT).

The study was prepared by the National Council of Applied Economic Research (NCAER) and provides the first comprehensive, scientifically derived estimate of logistics costs in India.

The report, titled Assessment of Logistics Cost in India, was launched last week by Commerce and Industry Minister Piyush Goyal.

It highlights that earlier figures of 13-14 per cent of GDP often cited by policymakers and industry were based on incomplete data or external studies, leading to confusion among stakeholders.

According to the study, logistics cost growth has been slowing over the past five years due to major government initiatives. These include the PM Gati Shakti National Master Plan, dedicated freight corridors, Sagarmala project, integrated check posts, and the unified logistics interface platform, which have collectively improved efficiency.

The report provides detailed insights by assessing costs across transport modes, product categories, and firm sizes.

Rail transport was found to be the most cost-efficient at Rs 1.96 per tonne per km, compared to Rs 11.03 for road transport (excluding first/last mile costs).

Air freight, while the fastest, remains the most expensive at Rs 72 per tonne per km, restricting its use to high-value and time-sensitive goods.

The findings also highlight global comparisons. Logistics costs in Indonesia are about 24 per cent of GDP, while South Korea reports around 8 per cent. China’s logistics costs in 2023 were estimated at 14.4 per cent of GDP.

The report is expected to serve as a key benchmark for improving India’s logistics competitiveness and attracting global investments.

(KNN Bureau)