Logistics Cost in India: Assessment and Long-term Framework

India’s National Logistics Policy, launched on 17 September 2022, aims to reduce logistics costs in India in order to enhance efficiency and competitiveness, and foster innovation across various sectors of the economy. In this context, it is important to reliably measure the costs associated with logistics and identify ways to reduce these costs. Since there is currently no official estimate nor any scientific framework for determining logistics costs in the country, the Logistics Division notified a Task Force on 28 March 2023, comprising members from academia, international experts, NITI Aayog, Asian Development Bank (ADB), line Ministries and industry associations, with the objective of developing a framework for estimating logistics costs. Two senior members of the NCAER faculty, Professors Poonam Munjal and Sanjib Pohit, were among the members appointed for this Task Force. Several meetings of the Task Force were held between March and October 2023, to discuss various issues, including global benchmarks and methodologies, the best possible measurement methods for India, and the availability of updated or even real-time data, among other things. This report is the outcome of this extensive exercise. Based on secondary data available from the Ministry of Statistics & Programme Implementation’s (MOSPI) Supply Use Tables and National Account Statistics, and NCAER’s 2019 study, “Analysis of India’s Logistics Costs”, this report provides trends on aggregated estimates of logistics cost as a percentage of GDP, along with recommendations for a long-term logistics cost calculation framework.