India’s Logistics Cost to Drop to 9% by December 2025: Nitin Gadkari
Summary
Union Minister for Road Transport and Highways Nitin Gadkari announced that India’s logistics costs are expected to fall to single digits — around 9% of GDP — by December 2025. He cited an IIM Bangalore study attributing a 5–6% reduction so far to the rapid expansion of the national highway network. The warehouse-to-consumer segment has already seen a 1.33% cost reduction. Gadkari said continued infrastructure development and improved multimodal connectivity are critical to meeting the government’s target of reducing logistics costs below 10% to match global benchmarks.
Key Points
- Nitin Gadkari forecasts logistics costs will reach approximately 9% of GDP by December 2025.
- An IIM Bangalore study credits 5–6% of cost reduction to the rapid expansion of national highways.
- Warehouse-to-consumer logistics costs have fallen by about 1.33%.
- Government aims to bring costs below 10% through continued infrastructure build-out and multimodal links.
- Lower logistics costs are expected to boost industrial profitability and make Indian goods more globally competitive.
Author style
Punchy: This is a clear policy signal — faster roads and better modal links are being used to drive down a critical drag on Indian industry. If delivered, it’ll reshape cost structures for exporters and domestic manufacturers alike. Worth noting and watching closely.
Why should I read this?
Want to know why companies might soon pay less to move stuff around India? This is the short version — the government says better roads and multimodal connections are already cutting costs, and they expect single-digit logistics costs by end-2025. It matters for pricing, margins and export competitiveness. Quick and useful if you work in supply chain, manufacturing or trade.
Context and Relevance
Logistics costs are a major component of India’s cost of doing business and have historically been higher than many peer economies. The government’s target to reduce logistics costs below 10% of GDP aligns with broader pushes: national highway expansion, multimodal logistics parks, freight corridors and port/airport improvements. Achieving ~9% would narrow the gap with global benchmarks, helping exporters, improving margins across manufacturing and encouraging further investment in supply-chain infrastructure. The IIM Bangalore study provides early empirical support for the benefits of road infrastructure investment, but ongoing success will depend on completing multimodal links, warehousing standards and operational efficiencies.