Quantifying India's Logistics Costs

The prevalence of high logistics costs in India as compared to other countries with a similar environment and level of development is a matter of concern as it poses challenges for the manufacturing growth and comprehensive development of the country. Several reasons are cited for the high logistics costs in India, including an unfavourable policy regime, lack of a multimodal transport system and consequently the heavy reliance on road transport, a fragmented storage infrastructure, the presence of multiple stakeholders in the entire transport and storage value chain, poor quality of road and port infrastructure, and the absence of technological intervention in storage/transportation and distribution activities. These high logistics costs inevitably have an adverse effect on the country’s global competitiveness.