In the 2024 Union Budget, the Indian government allocated ₹1,10,055 crore to enhance the logistics sector, aiming to reduce logistics costs and improve efficiency. This investment focused on infrastructure development, including the completion of national highways in states like Tamil Nadu, Assam, Kerala, and West Bengal, which was expected to significantly improve road connectivity. Additionally, the budget emphasised the commissioning of the Eastern and Western Dedicated Freight Corridors (DFCs), with a substantial allocation to expedite their completion, thereby reducing transit times and costs. A ₹1,500 crore scheme was introduced to promote digital payments, enhancing customer interfaces for logistics companies. Furthermore, a new scheme was launched to support the flagging of merchant ships in India, with a fund of ₹1,624 crore allocated to provide subsidy support to Indian ship owners. The budget also reflected a commitment to increasing green energy initiatives, aiming for a zero-carbon environment.
As we approach the 2025 Union Budget, industry stakeholders are keenly anticipating further support to sustain and accelerate this growth trajectory. The logistics sector is particularly hopeful for continued investments in multimodal connectivity, tax reforms, and policies that foster innovation and sustainability. The upcoming budget is expected to address these areas, ensuring that the logistics industry remains a cornerstone of India’s economic development.
As India aspires to grow as a developed economy by 2047, the focus should be on real Ease of Doing Business, simplifying laws, and fostering trust to boost sectors like manufacturing, healthcare, telecom, textiles, chemicals, and pharma. FFFAI suggests establishing a department dedicated to simplifying statutory clearances for export and import consignments.
Several key areas should be prioritised in the budget for the logistics sector:
- Setting timelines for customs clearance (24 hours for air imports, 48 hours for sea imports, etc.).
- Establishing escalation mechanisms for consignment delays.
- Simplifying bottlenecks in faceless assessments.
- Creating a trust-based environment with clear laws to prevent interpretative disputes.
- Emphasising mandatory training and skill development for all stakeholders.
- Adopting a consultative approach for voluntary customs duty payments to reduce litigation.
- Implementing next-generation software to replace the ICEGATE/EDI system.
These measures will reduce logistics costs, enhance global competitiveness, and create transparency in EXIM clearance processes.
For India’s logistics sector to flourish, the integration of physical and regulatory infrastructure is crucial. While physical infrastructure, such as ports, roads, and railways, is improving, the regulatory framework remains outdated and burdensome. Compliance challenges create stress for law-abiding businesses, often leading to unnecessary legal battles that drain time and resources, particularly for MSMEs, which have limited resources. This adversarial approach can hinder growth and innovation in the sector. To address this, the government should focus on building trust with businesses, simplifying compliance processes, updating outdated laws, and adopting a partnership-driven approach. A supportive regulatory framework is essential for unlocking the full potential of India’s logistics sector. Hopefully, the upcoming budget will address these issues to foster growth.
India is growing rapidly, with strong government support driving this growth. Senior bureaucrats have shown a willingness to assess industry needs and implement measures that benefit exports and the economy. For the upcoming budget, we hope for initiatives that strengthen the logistics sector, enhance infrastructure, and support exporters. The COVID-19 pandemic underscored the crucial role of logistics, with the industry working tirelessly to meet demands. Policies that recognise this resilience will fuel further progress. India is headed in the right direction, and more incentives and schemes for infrastructure development in logistics are needed.
As the Union Budget approaches, I believe it’s crucial for state governments to officially recognise logistics as an industry and logistics service providers as key players. Additionally, improving logistics efficiency through public-private partnerships is vital. While the government is developing infrastructure, private companies are focusing on non-infrastructure aspects. I would like to see more collaboration between the public and private sectors, which could significantly enhance progress.
India is known as the pharmacy of the world, and exports in this sector are expected to grow substantially. To further boost exports, I believe the government should focus on promoting the export of innovative drugs. This could help increase pharma exports from $30 billion to $60 billion, creating greater opportunities for India in the global pharmaceutical market.
The Indian government’s focus on enhancing shipping infrastructure and promoting indigenous shipbuilding has set the stage for transformative growth in the maritime sector. However, India’s current global market share in shipbuilding remains at a modest 0.05%, trailing far behind leaders like China (~47%), South Korea (~30%), and Japan (~17%). To bridge this gap, strategic government initiatives and enhanced budgetary support for ports and shipyards could serve as pivotal drivers of change, paving the way for a robust maritime economy.
The proposed Maritime Development Fund (MDF) for long-term indigenous manufacturing and the anticipated Shipbuilding Subsidy (SBS) Policy 2.0 are poised to strengthen the shipbuilding ecosystem, fostering self-reliance and global competitiveness. As the Union Budget 2025 approaches, prioritising investments in shipbuilding infrastructure, incentivizing green technologies, and creating export opportunities for Indian shipyards will be critical to ensuring sustained growth and positioning India as a global maritime player.
As the announcement of Budget 2025-26 approaches, it is crucial to address key areas in the logistics and transportation sector. Tax incentives should be provided for purchasing e-vehicles and establishing charging stations, alongside centralizing vehicle registration for transport vehicles (excluding passenger vehicles) to ease interstate movement. Disparities in state tax rates should be resolved to prevent transporters from registering vehicles in low-tax states unnecessarily. The cumbersome tax process for transferring vehicles between states must be abolished, with centralized compliance for transportation, warehousing, and allied services, supported by subsidies to encourage adherence. Budget allocation for skilling youth in logistics, offering educational loans, and incentivizing corporate and MSME investments in training programs is vital. MSMEs need simplified access to loans, transparent grants under Startup India, and seed funding. Technology adoption should be incentivized, and a national platform for logistics innovation created. Lastly, export subsidies for GI-tagged products and facilitation centers under the One District One Product initiative can empower MSMEs effectively.
Logistics will be a cornerstone in supporting India’s growth, especially as the nation aims for its Viksit Bharat vision by 2047. While India benefits from strong per capita consumption, challenges like significant wastage of perishable goods persist. Efficient logistics systems can bridge these gaps, enhancing the effectiveness of government policies. Globally, countries with advanced logistics systems set the benchmark, and India is quickly catching up. As logistics connects regions through e-commerce and FMCG networks, it reshapes consumption patterns, bringing goods closer to consumers.
Looking ahead, speed will become a defining factor for success in all sectors. The growing road congestion and rising demand for instant access make it essential for businesses to prioritise rapid execution, transportation, and service delivery. Companies that focus on speed will outpace competitors and contribute to India’s development, aligning perfectly with the Viksit Bharat Vision for a more connected and efficient future.
