India's logistics cost as a share of GDP has been one of the most persistent drags on its manufacturing competitiveness. At 13–14% of GDP — nearly double the global average of 7–8% — every tonne of goods moved in India costs significantly more than in China, Vietnam, or Germany. That cost differential has embedded itself into the price of every Indian export, every factory-gate good, and every kilogram of food between farm and consumer. Closing the logistics cost gap is not an infrastructure ambition. It is a manufacturing imperative.

The Economic Survey 2025–26 carried a number that deserves wider attention: India's logistics costs have fallen below 8% of GDP for the first time. If sustained, it would represent the most consequential structural improvement in India's manufacturing competitiveness in a generation. The question is what drove the improvement — and whether the last-mile problems that have historically limited India's logistics performance have genuinely been resolved.

What GatiShakti Has Built

PM GatiShakti — the National Master Plan for multimodal connectivity launched in October 2021 — is the institutional architecture that has driven the logistics transformation. Its core innovation is deceptively simple: instead of individual ministries planning infrastructure in isolation, GatiShakti integrates planning across all infrastructure-relevant agencies on a single geospatial platform. As of November 2025, 57 central ministries and departments are onboarded, with over 1,700 data layers integrated into the National Master Plan. The result is infrastructure planning that identifies bottlenecks before they are built in, avoids duplication of capital expenditure, and coordinates road, rail, port, and utility infrastructure as a single system rather than four separate ones.

The outcomes are visible in the numbers. The national highway network has expanded from 91,287 km in FY2014 to 1,46,572 km as of December 2025. Operational high-speed corridors have scaled from approximately 550 km to over 5,300 km in the same period. Inland Water Transport cargo — one of the most cost-efficient freight modes and historically the most neglected — has surged from 18 million metric tonnes in 2013–14 to 146 MMT in 2024–25, with 32 National Waterways spanning 5,155 km now operational.

The Unified Logistics Interface Platform — ULIP — connects 44 systems across 11 ministries through over 2,000 data fields, with more than 1,700 companies registered on the platform. For the first time, a shipper can track a container from factory gate through rail, port, and ocean freight on a single digital interface. The reduction in paperwork, duplicate data entry, and information asymmetry that ULIP enables is not glamorous infrastructure. It is the kind of systemic efficiency gain that compounds across millions of transactions.

The Dedicated Freight Corridor Achievement

The single most transformative logistics infrastructure achievement of the current period is the near-completion of the Dedicated Freight Corridors. The Eastern DFC — from Ludhiana to Sonnagar (1,337 km) — and the Western DFC — from JNPT to Dadri (1,506 km) — together span 2,843 km of dedicated freight rail. As of March 2025, 2,741 route kilometres — 96.4% of the total — are operational.

The DFCs' impact on freight logistics is structural. Dedicated tracks eliminate the conflict between passenger and freight trains that has historically reduced average freight speeds on Indian Railways to approximately 25 km/h — among the slowest in the world for a major rail network. On the DFCs, freight trains operate at 50–60 km/h, with double-stack container capability that doubles effective capacity per train. Transit times on the Western DFC corridor — connecting India's western ports to the northern manufacturing heartland — have fallen by approximately 40%. For industries including automobiles, textiles, and consumer goods whose supply chains run along this corridor, the cost and time savings are already material.

Budget 2026–27 has extended the DFC network further — sanctioning a new corridor from Dankuni to Surat, operationalising 20 national waterways for cargo, and allocating ₹10,000 crore for a container manufacturing scheme that addresses the equipment gap the expanded rail capacity requires.

The Last-Mile Problem

The macro logistics transformation — highway expansion, DFCs, waterways, GatiShakti coordination — is real and significant. The last-mile problem is where India's logistics performance still falls short of its ambition.

Last-mile logistics — the movement of goods from distribution centres to final consumers, and from farm gates to mandis or cold storage — is dominated by the unorganised sector. Over 90% of India's logistics industry is unorganised, characterised by small owner-operators, ageing vehicle fleets, minimal technology adoption, and no formal employment relationships. The skill gap is acute: the sector employs over 22 million people and is projected to add 10 million more by 2027, but trained logistics professionals — in supply chain management, warehouse operations, and technology-enabled distribution — are in critically short supply.

Cold chain logistics is the most consequential last-mile gap. India loses approximately 16% of its fruit and vegetable production and 7% of its food grains to post-harvest losses annually — a waste of approximately ₹92,000 crore that falls disproportionately on farmers and food-insecure consumers. Cold chain infrastructure — refrigerated warehouses, reefer trucks, cold storage at mandis — has expanded significantly under the NLP framework, but it remains far below the density that India's perishable agriculture output requires.

The 35 Multimodal Logistics Parks being developed under Bharatmala Pariyojana — with an estimated outlay of ₹50,000 crore — are the right physical infrastructure response to the last-mile gap. MMLPs consolidate warehousing, customs clearance, cold storage, and inter-modal transfer into single hubs that dramatically reduce the number of handling steps between origin and destination. Their development pace, however, has been slower than the programme's ambition: land acquisition, connectivity infrastructure to the parks, and private operator procurement have all added time to timelines.

The Manufacturing Competitiveness Payoff

The strategic significance of India's logistics transformation extends beyond the sector itself. India's PLI manufacturing programme, its semiconductor ambitions, its defence export targets, and its IMEC corridor connectivity all depend on a logistics system capable of moving goods competitively — from factory to port, from mine to refinery, from farm to shelf.

A logistics cost at 8% of GDP rather than 14% is a 6 percentage point structural improvement in the cost competitiveness of every Indian manufacturer. At India's current GDP of $3.9 trillion, that represents approximately $230 billion in annual efficiency gains that compound into export competitiveness, consumer prices, and corporate margins across the entire economy.

India's logistics revolution is not complete. The last-mile, the cold chain, the skill gap, and the unorganised sector's technology adoption deficit remain genuine constraints. But the structural foundation — GatiShakti's planning integration, the DFCs' freight transformation, ULIP's digital backbone, and the NLP's policy architecture — is in place. The revolution has begun. The work now is to extend it to the last mile.

The Hind covers policy, power, and strategic affairs from India's perspective. Views expressed are analytical and editorial.