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)
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