September 26, 2025

New Delhi: Get ready for some eye-opening news on India’s logistics scene! The government’s latest report reveals that logistics cost in India is estimated at 7.97% of the country’s GDP in 2023-24. The buzz? Rail transport is the star, costing just Rs 1.96 per tonne per kilometre – a bargain compared to the hefty Rs 11.03 charged by road. The Department for Promotion of Industry and Internal Trade (DPIIT) shared these spicy details from a report named “The Assessment of Logistics Cost in India,” prepared by the National Council of Applied Economic Research (NCAER). This report is special – it uses a smart mix of data from all over India to give the first scientific estimate of logistics cost. Here's a kicker: air freight is the fastest but the priciest at Rs 72 per tonne per km. No wonder it’s mostly used for precious goods that need to zoom on time. Until now, people often believed that logistics took up 13-14% of India’s GDP. But this new study clears the fog, saying those older numbers were from unreliable sources causing confusion for officials and business folks alike. The report also shows a slowing growth in logistics costs over the last five years. This positive trend is thanks to big moves like the PM Gati Shakti National Master Plan, dedicated freight corridors, the Sagarmala project, integrated check posts, and the new Unified Logistics Interface Platform. Want some global spices? In Indonesia, logistics cost is a whopping 24% of GDP, while South Korea keeps it tight around 8%. China’s logistics cost stands at 14.4%. Digging into rail specifics, some heavy hitters like iron ore, coking coal, pig iron, and petrol cost more than the average Rs 1.96. Why? These goods need special wagons, careful handling, and strict safety measures. To pump up efficiency, the report suggests fancy upgrades: Dedicated Freight Corridors to clear jams, railway modernization, GPS tracking, automation for safety, green energy vehicles, special truck lanes, multi-modal parks, and modern airports outside big cities. Even river channels will be deepened for smooth, year-round travel. On the ground, the government has launched integrated logistics plans for cities in eight states. The goal: slash industry transaction costs, spot infrastructure gaps, and draw clear roadmaps for a speedy and affordable logistics future. So, India’s logistics world is moving fast. With railways leading the charge as the cheapest option, and smart projects rolling out nationwide, the dream of smoother, cheaper freight movement is coming alive!

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Tags: Logistics cost, India gdp, Rail transport, Freight, Ncaer report, Pm gati shakti,