SDG 9: Industry, Innovation & Infrastructure | SDG 17: Partnerships for the Goals
Institutions: Ministry of Commerce & Industry | NITI Aayog
The Department for Promotion of Industry and Internal Trade (DPIIT), in collaboration with the National Council of Applied Economic Research (NCAER), has released the first comprehensive estimate of India’s logistics cost. The report finds that logistics accounted for 7.97% of GDP in 2023–24, significantly lower than earlier unofficial estimates of 13–14%. It uses a hybrid methodology, combining national accounts data with field surveys across industries, transport operators, and logistics service providers.
The study shows strong mode-wise differences:
Rail is the most cost-efficient at ₹1.96 per tonne-km, though costs rise with first/last mile handling. Freight accounts for nearly 90% of rail costs
Road remains competitive for shorter hauls because of door-to-door flexibility despite higher per-km cost.
Waterways cost on average ₹2.30 per tonne-km - coastal shipping is as low as ₹1.80, but inland water transport reaches ₹3.30 due to infrastructure gaps and return-load issues
Air freight is the fastest but most expensive at about ₹72 per tonne-km, used mainly for high-value and time-sensitive goods
The report also identifies warehousing as a major non-transport cost, averaging ₹30 per sq. ft. per month, influenced by land availability, technology, and location. It highlights inefficiencies in handling, infrastructure, and multimodal integration, and estimates that rail becomes cheaper than road beyond ~600 km (with 500 km rail haul, 50 km each first/last mile)
This report is a cornerstone of the National Logistics Policy (NLP) 2022, which seeks to reduce India’s logistics costs to global benchmarks by 2030, improve its ranking in the Logistics Performance Index (LPI), and establish a data-driven support system for decision-making. By providing the first comprehensive and standardised estimate of logistics costs (7.97% of GDP in 2023–24), the study creates the baseline yardstick against which future progress will be tracked.
It also ties into the government’s wider logistics reform ecosystem. The SMILE initiative (supporting MSMEs in the logistics sector) gains a clearer evidence base on cost pressures across warehousing, transport, and administration. The Logistics Data Bank (LDB) complements this cost study with real-time cargo tracking, offering granular insights into efficiency bottlenecks. The LEADS index benchmarks state-level logistics performance, helping compare national cost aggregates with subnational strengths and gaps. Meanwhile, the Industrial Park Rating System (IPRS) connects directly to the report’s findings on warehousing and handling inefficiencies, highlighting where infrastructure improvements can reduce costs.
In sum, the report is not stand-alone: NLP 2022 set the targets, this report provides the yardstick, and SMILE, LDB, LEADS, and IPRS are the levers to achieve them.
Follow the full report here: DPIIT – Assessment of Logistics Cost in India 2023–24 (Report PDF)
Note: On 20 September 2025, the Ministry of Commerce & Industry announced the results of the Assessment of Logistics Cost in India through a PIB press release. Now, on 24 September 2025, DPIIT has released the full technical report (prepared with NCAER), providing detailed analysis of the findings.