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Published 21:52 IST, December 14th 2023

Logistics costs in India drop to 8.9% of GDP amid infrastructure advancements: NCAER

Government boosts infrastructure, cuts logistics costs, speeds cargo movement in India

Reported by: Business Desk
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Government boosts infrastructure, cuts logistics costs | Image: Shutterstock

Recent findings from the National Council of Applied Economic Research (NCAER) reveal a significant drop in India's logistics costs, now accounting for 8.9 per cent of the Gross Domestic Product (GDP). Enhanced infrastructure, propelled by increased government spending on highways, ports, and digital advancements, has accelerated cargo movement.

The 'Logistics Cost in India' report attributes this reduction in logistics expenses, encompassing transportation, warehousing, insurance, and administrative charges, to improvements in the road network, tax reforms, and the digitisation of supply chains. In 2021-22, these costs ranged between 7.8 per cent to 8.9 per cent of GDP, marking a decrease from 8.8 per cent to 10 per cent in 2012-13, as highlighted by Poonam Munjal, the lead author.

India's standing in the World Bank's Logistics Performance Index climbed six places to rank 38th out of 139 countries in 2023. This ascent is credited to advancements in road and port networks alongside digitized supply chains.

Comparatively, India boasts significantly lower average dwell times for truck cargo at ports, with a mere three days, whereas the United States and Germany report seven and ten days, respectively, as per the World Bank report.

Updated 20:46 IST, December 21st 2023