India Cuts Logistics Costs by a Third through Infrastructure Overhaul

India has achieved a near-one-third reduction in logistics costs through a sustained infrastructure investment drive, according to industry estimates and government assessments. The gains, spread across road, rail, port and digital freight systems, mark a structural improvement in the country’s supply chain competitiveness — a key prerequisite for realising its ambitions as a global manufacturing hub.      The cost reduction has been driven primarily by investments under PM Gati Shakti — the government’s integrated infrastructure planning framework — and complementary schemes including the National Logistics Policy, Bharatmala highway expansion, the Western and Eastern Dedicated Freight Corridors (DFCs), and Sagarmala’s port connectivity initiatives.      The Dedicated Freight Corridors, in particular, have been a game changer. The Western DFC, connecting JNPA to Punjab, and the Eastern DFC, running from Ludhiana to Kolkata, have significantly accelerated cargo movement and reduced dwell times at inland container depots. Heavy-haul double-stack trains — running at speeds and capacities previously unavailable on Indian railways — are moving bulk and container cargo at a fraction of the time and cost of road haulage.      Port modernisation has also contributed substantially. Faster vessel turnarounds, increased mechanisation at berths and terminals, improved pre-gate systems and better port-hinterland connectivity have collectively reduced the cost of maritime-related logistics. The introduction of e-way bills, faceless customs and the Unified Logistics Interface Platform (ULIP) have digitised several friction points that historically added time and cost to supply chains.         The impact is felt across manufacturing sectors. Automotive, textiles, electronics, agri-products and e-commerce companies all report lower transit times and improved predictability in their supply chains. Export competitiveness — particularly for labour-intensive goods where freight costs as a proportion of product value are higher — has improved noticeably.                                                                                                                                                                                                                                                      

India has set an ambitious target to reduce logistics costs to 8 per cent of GDP, from an estimated 13-14 per cent a decade ago. The country will require approximately 215 multimodal logistics parks by 2047 to fully support its projected manufacturing and trade volumes. Continued investment in last-mile connectivity, cold chain infrastructure, warehousing and digital integration will be essential to sustaining this trajectory and ensuring India’s supply chain competitiveness keeps pace with its manufacturing growth ambitions.