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Updated December 17th, 2023 at 09:58 IST

India cuts logistics costs to below 9% of GDP with higher state spending

The logistics costs were down in the range of 7.8 per cent to 8.9 per cent of GDP in 2021-22, compared to 8.8 per cent to 10 per cent of GDP in 2012-13.

Business Desk
Infrastrucutre
Infrastrucutre | Image:Unsplash
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India's logistics costs have come down to below 9 per cent of gross domestic product, helped by rising state spending on roads, ports and digitisation, a report by the government said on Friday. While releasing the report, one government official said that the logistics costs were now comparable to many Western economies, and the government was aiming to further improve infrastructure through higher state and private investments.

The logistics costs were down in the range of 7.8 per cent to 8.9 per cent of GDP in 2021-22, compared to 8.8 per cent to 10 per cent of GDP in 2012-13, said Poonam Munjal, the lead author of the report. "In terms of competitiveness, logistics costs for our producers - both domestic and exporters - have come down," Rajesh Kumar Singh, secretary at the Department for Promotion of Industry and Internal Trade (DPIIT) said after the launch of the report.

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The report titled as "Logistics Cost in India" authored by Delhi-based think-tank National Council of Applied Economic Research, said logistics costs including transportation, warehousing, insurance and administrative charges had come down thanks to improvements in road network, tax reforms and digitisation of supply chains. According to the World Bank's Logistics Performance Index, India climbed six places to rank 38th out of 139 countries in 2023, helped by improving road and port networks and digitisation of the supply chains. The average dwell time, the waiting time for a truck cargo at a port, was just 3 days in India when compared to 7 days in the United States and 10 days in Germany, said the World Bank report. The government is spending over 10 trillion rupees on infrastructure in the current fiscal year ending March, about one-third higher compared to the previous fiscal year.

"Our next aim is to improve our global logistics ranking, among the top 25 countries," said Singh.

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Published December 14th, 2023 at 19:21 IST

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