India Accelerates Logistics Reforms Amid Global Supply Chain Disruptions

India Accelerates Logistics Reforms Amid Global Supply Chain Disruptions​

Government Targets Cost Efficiency as Logistics Expenses Reach 7.97% of GDP​

New Delhi, March 20
Amid ongoing disruptions in global supply chains due to the conflict in West Asia, the government has intensified its focus on strengthening India’s logistics ecosystem and reducing associated costs, which are currently estimated at 7.97 percent of GDP or approximately Rs 24.01 lakh crore.

Structural Transformation Driven by Policy and Infrastructure Push​

Officials stated that India’s logistics sector is undergoing a phase of structural transformation, supported by coordinated policy reforms, institutional realignment, digital platforms, and large-scale infrastructure planning.

These efforts are aimed at addressing long-standing challenges, including fragmented planning, modal inefficiencies, limited visibility across supply chains, and elevated logistics costs.

According to an official study, logistics expenses account for a significant share of the economy at 7.97 percent of GDP, translating into an estimated Rs 24.01 lakh crore in absolute terms.

Integrated Policy Framework to Improve Efficiency​

Officials highlighted that India’s logistics reforms are anchored in a combination of policies, digital platforms, and infrastructure initiatives designed to improve operational efficiency, reduce costs, and strengthen supply chain integration.

Prime Minister Narendra Modi, speaking at an event on March 12, referred to the ongoing conflict as a trigger for a global energy crisis and described it as a test of national resilience, calling for a response rooted in peace, patience, and public awareness.

He also underscored the government’s continuous efforts to mitigate disruptions in international supply chains.

Logistics Key to India’s Economic Growth Strategy​

Officials noted that efficient logistics systems are becoming increasingly central to India’s economic growth, enhancing both competitiveness and global connectivity.

Flagship initiatives such as the National Logistics Policy and PM GatiShakti have provided momentum to this transformation by laying the groundwork for a more integrated and data-driven logistics ecosystem.

SMILE Programme Focuses on Multimodal Integration​

The government’s Strengthening Multimodal and Integrated Logistics Ecosystem (SMILE) programme is playing a key role in advancing integrated logistics planning at state and city levels.

Under this programme, eight pilot cities across eight states have been selected to assess existing logistics infrastructure and implement measures to improve efficiency and reduce costs.

Each pilot city is developing a comprehensive logistics plan covering urban and peri-urban regions.

Data-Driven Planning to Optimize Freight Movement​

These integrated plans focus on mapping and optimising freight-intensive activities, including retail distribution, e-commerce delivery routes, warehousing clusters, truck terminals, and last-mile connectivity corridors.

Officials added that the initiative emphasises data-driven planning, institutional coordination, congestion and noise reduction, adoption of low and zero-emission vehicles, process automation, and improved alignment between freight and passenger movement.