Logistics costs set to drop to single digit in next five years

Union Road Transport and Highways Minister Nitin Gadkari announced that India’s logistics costs are expected to decrease to single digits within five years. The logistics costs currently range from 14-18% of GDP, compared to a global benchmark of about 8%. Reducing logistics costs is key to improving India’s economic efficiency and enhancing its competitiveness on the global stage.

India’s logistics costs are projected to fall to single digit within the next five years as the country constructs a network of world-class highways and expressways, according to Union Road Transport and Highways Minister Nitin Gadkari. 

While speaking at the ‘Deloitte Government Summit,’ the Minister emphasized that improving highway infrastructure is key to reducing logistics expenses.  The Economic Survey for 2022-23 reported that logistics costs in India are between 14-18% of GDP, whereas the global benchmark stands at 8%.

Mr. Gadkari also expressed his ambition to make the Indian automobile industry the largest in the world, highlighting that its size has increased from Rs 7.5 lakh crore in 2014 to Rs 22 lakh crore in 2024. 

He informed, “Last year, India had overtaken Japan to become the third-largest automobile market in the world, only behind the US and China.” The Minister also emphasized the need for India to boost exports while reducing imports to strengthen the country’s economic position. He advocated for the development of ‘smart villages’ as economically viable counterparts to smart cities. 

“If we can increase the purchasing power of farmers, then it will have a big positive impact on our economy,” he noted. Mr. Gadkari also highlighted the importance of efficiency, stating that performance audits should take priority over financial audits within organizations.