Union Road Transport and Highways Minister Nitin Gadkari has projected that India’s logistics costs will drop to single digits within the next five years. Speaking at the Deloitte Government Summit, Gadkari underscored the ministry’s efforts in constructing highways and expressways, which he believes will significantly contribute to this reduction.
While current estimates from the National Council of Applied Economic Research (NCAER) place India’s logistics costs at 7.8% to 8.9% of GDP in 2021-22, Gadkari’s optimistic forecast aligns with the government’s broader infrastructure initiatives aimed at enhancing efficiency in the transport sector. By bringing logistics costs down, India hopes to strengthen its economic competitiveness, positioning itself more favourably in global markets.
Gadkari also emphasised that improving India’s transport infrastructure is key to bolstering its automobile industry, which is now the third largest globally, behind only the US and China. India’s automobile industry has grown from Rs 7.5 lakh crore in 2014 to Rs 22 lakh crore in 2024, highlighting the potential benefits of reduced logistics costs on industrial growth.
The minister stressed that reducing logistics expenses will not only boost the domestic economy but also aid in increasing exports, reducing imports, and ultimately improving the global competitiveness of Indian goods. He also highlighted the importance of performance audits in organisations, underscoring efficiency over financial metrics.
This focus on lowering logistics costs aligns with national strategies like the PM Gati Shakti initiative, aimed at modernising and integrating India’s infrastructure, making the country’s supply chain more agile, cost-effective, and globally competitive.
