Struggling Indian logistics industry looking forward to the National Logistics Policy

The Indian logistics industry employs over 22 million people, acting as the backbone and connecting thread among multiple industries.

- Kuntala Sarkar

The dedicated freight corridors, road, rail, and sea (ports) connectivity enables and strengthens the supply chain in India accelerating economic growth. Till 2021, the Indian logistics industry was valued at $250 billion. Industry insiders are expecting it to reach around $380 billion by 2025, with a 10-12% YoY (year on year) growth. However, the industry faced foremost challenges due to the Covid-19 lockdowns, and now high inflationary pressure is another concern in the post-Covid period.

High logistics cost in India

According to the Logistics Performance Index (LPI) released by the World Bank, India is ranking 44th globally, facing multiple challenges - one of them being the much higher cost of logistics. Rising fuel cost is one of the major reasons. The logistics cost in India mostly floats around 12-13% of the GDP mark, which shows a much higher rate than the BRICS countries and the US and Germany which are at 11%, 9.5%, and 8% respectively. The Union government has been trying to curtail this; however, inflation is a major blockade.

National Logistics Policy (NLP)