The LEADS initiative, a key driver of India’s logistics sector, evaluates state performance and fosters competition. This report analyses its evolution, highlights key findings, and outlines the path towards a more efficient, sustainable, and inclusive logistics ecosystem.
The Indian government has prioritised the development of a robust and efficient logistics sector, recognising its crucial role in economic growth. The Logistics Ease Across Different States (LEADS) initiative, launched in 2018 by the Department for Promotion of Industry and Internal Trade (DPIIT), plays a pivotal role in this transformation. By benchmarking logistics performance across Indian states and Union Territories (UTs), LEADS fosters healthy competition, encourages policy improvements, and aligns India with global best practices.
Government initiatives and LEADS framework
The government has implemented several key policies to enhance the logistics sector:
- National Logistics Policy (NLP): Launched in 2022, the NLP aims to reduce logistics costs to 8-10% of GDP, promote multimodal transport, and improve India’s Logistics Performance Index (LPI) ranking.
- PM Gati Shakti Master Plan: This initiative focuses on integrated infrastructure development by aligning the efforts of various ministries to reduce logistics inefficiencies.
- Unified Logistics Interface Platform (ULIP): A digital platform that facilitates seamless data exchange among stakeholders, enabling better coordination and transparency.
- Viability Gap Funding (VGF): Provides financial support for green logistics projects, including EV infrastructure and carbon-neutral logistics parks.
- Skill India Mission: Collaborates with industry players to offer logistics-focused training programs, including those tailored to women.
LEADS plays a crucial role in supporting these government initiatives by:
- Benchmarking Performance: Identifying strengths and areas for improvement in logistics performance across states and UTs.
- Encouraging Competition: Ranking states and UTs, motivating them to adopt best practices and improve their logistics ecosystems.
- Providing Policy Support: Offering insights for targeted interventions in warehousing, transport, and connectivity.
- Boosting Global Rankings: Helping align India with global standards, contributing to the improvement of its LPI ranking from 44th in 2018 to 38th in 2023.
Evolution of LEADS: A balanced approach
The LEADS 2024 report, now in its sixth edition, has evolved from a purely perception-based assessment to a balanced approach that combines objective data with stakeholder feedback. This shift provides a more comprehensive view of logistics performance, capturing trends that may not be directly linked to policy changes.
Key Highlights of LEADS 2024:
- Refined Framework: Incorporates both subjective and objective indicators for a more holistic evaluation.
- Actionable Recommendations: Provides specific recommendations for states to address identified logistics challenges.
- Enhanced Stakeholder Engagement: Includes greater industry and expert input for richer insights.
“Efforts to resolve transport challenges, ensure quick last-mile delivery, save time and costs for manufacturers, and prevent agro-product wastage led to the National Logistics Policy. This marks the beginning, where policy combined with performance drives progress.” Hon’ble Prime Minister of India, Shri Narendra Modi
Key Improvements in LEADS 2024
- New Indicators: Introduced new indicators such as “Adequacy and Quality of Terminal Services” and a new “Sustainability and Equity Logistics” pillar, focusing on “State’s Commitment to Green Logistics” and “Women’s Participation in Logistics Workforce.”
- Objective-Based Enhancements: Incorporated new metrics in regulatory and institutional support, such as Public-Private Partnerships (PPPs), ease of compliance, and the adoption of digital logistics platforms (ULIP). The “Logistics Enablers” pillar now evaluates the speed of key networks, port and rail access, and multimodal terminals.
- Big Data and Analytics: Utilized Map API and data analysis to identify bottlenecks and congestion on key road corridors, enabling targeted infrastructure upgrades and traffic management.
Methodology and data analysis
The LEADS 2024 report is based on a combination of survey data and objective data from state government reports:
- Survey Data Collection: Data was gathered through field visits and online surveys targeting key stakeholders across the logistics value chain, including service providers, terminal operators, transport services, and end-users. A total of 7,198 reliable responses were analyzed.
- Objective Data: Incorporated objective data from state and UT departments, covering logistics policies, infrastructure, regulatory frameworks, and budget allocations.
- Data Analysis: Employed advanced techniques like Structural Equation Modelling (SEM) and Principal Component Analysis (PCA) to analyze perception data and measurable indicators. The final score combined 67.5% perception data and 32.5% objective data, giving weight to stakeholder experiences alongside measurable outcomes.
Performance ratings and state-level analysis
States and UTs were categorized as Achievers, Fast Movers, or Aspirers based on their overall logistics performance:
- Achievers: States with strong infrastructure and efficient processes.
- Fast Movers: States showing rapid progress and development.
- Aspirers: States with potential, working towards better logistics systems.
State/UT Performance in LEADS 2024
Regional Performance Trends
Coastal Group: Leads with an average score of 3.58, but with significant variability among states.
- Landlocked Group: Shows consistent growth with an average score of 3.38.
- North-Eastern Group: Has the lowest average score of 3.01, indicating a need for focused interventions.
- UTs: Show a mixed performance with an average score of 3.06, reflecting disparities across regions.
“India’s vision of ‘Viksit Bharat’ by 2047 hinges on modern infrastructure and world-class logistics systems, essential for becoming a USD 32 trillion economy. The LEADS initiative exemplifies cooperative federalism by enhancing logistics efficiency among states through data-driven insights across infrastructure, services, operating environment, and sustainable logistics. LEADS 2024 introduces new indicators and methodologies to evaluate state logistics performance, identify bottlenecks, and improve key freight corridors.
This progress reflects the dedication of State Governments, UTs, and stakeholders. I commend their efforts and encourage collective action to build a resilient, efficient, and sustainable logistics ecosystem.”
Piyush Goyal, Minister of Commerce & Industry, Government of India
“India’s logistics sector is undergoing rapid transformation through strategic reforms like the National Logistics Policy 2022 and the PM GatiShakti National Master Plan, driving multimodal connectivity and efficiency. With a logistics market projected to grow from USD 318 billion in 2024 to USD 484 billion by 2029, these reforms are crucial for achieving the goal of a USD 5 trillion economy by 2026.
LEADS plays a key role in fostering competition among States and UTs, evaluating infrastructure, services, and regulatory environments to enhance logistics ecosystems. The 2024 report introduces new indicators, including rail network access, road corridor speed, and growth in logistics training, offering deeper insights into state performance.
I commend the efforts of State and UT administrations and believe that continued collaboration and innovation will help India achieve its logistics and infrastructure goals.”
Jitin Prasada, Minister of state for Commerce & Industry, and Electronics & Information Technology, Government of India
Deep Dive: States group performance
Coastal states group
India’s coastal states are critical to logistics, hosting 12 major ports and accounting for 65% of total exports in FY2023-24. Gujarat, Karnataka, and Tamil Nadu continue to excel, while Kerala and West Bengal require significant improvements.
Key Metrics:
Insights:
- Coastal states are adopting green logistics practices but require further efforts in infrastructure investment and workforce development.
Landlocked states group
Haryana, Telangana, and Uttar Pradesh remain top performers, with Uttarakhand joining the achievers’ category. Bihar and Himachal Pradesh have shown notable progress, moving to the Fast Movers category.
Key Metrics:
Insights:
- Landlocked states benefit from enhanced rail and road connectivity. However, the integration of multimodal facilities remains a challenge for many states.
- Uttarakhand’s focused investments in logistics have led to significant gains.
Union Territories Group
Delhi and Chandigarh continue to excel, while Jammu & Kashmir and Dadra & Nagar Haveli have shown significant progress as Fast Movers.
Key Metrics:
Insights:
- Union Territories benefit from compact geographies, aiding operational efficiency.
- Digital integration in Delhi and Chandigarh sets benchmarks for others.
- Sustainability remains an area for improvement, particularly in remote territories.
“The National Logistics Policy 2022 is key to enhancing India’s economic activities and ensuring efficient goods movement domestically and internationally. It aims to lower logistics costs, improve India’s rank on the World Bank Logistics Performance Index, and establish a data-driven ecosystem.
States and UTs play a vital role in this transformation by driving production, trade, and logistics efficiency. Initiatives like LEADS, launched by the Department for Promotion of Industry and Internal Trade, assess and rank logistics ecosystems across States and UTs, fostering competition and collaboration. LEADS 2024 introduces new parameters, such as integration with PM GatiShakti and geo-referencing of land records, to deepen digital integration in logistics performance.
I extend my gratitude to all stakeholders for supporting LEADS 2024 and encourage States and UTs to leverage these insights to build a world-class logistics sector that elevates India’s global standing.”
Amardeep S. Bhatia I.A.S, Secretary, Ministry of Commerce & Industry, Deptt. For promotion of Industry and Internal Trade, Government of India
The way forward for India’s logistics sector
The future of India’s logistics sector is driven by four key pillars:
- Infrastructure:
- PM GatiShakti National Master Plan: Streamlining logistics projects to reduce bottlenecks and enhance connectivity across states.
- Holistic Infrastructure Development: Expanding multimodal transport systems, upgrading rural-urban connectivity, and building smarter hubs.
- First-Mile Aggregation Points: Establishing hubs to streamline agricultural and MSME supply chains.
- Services:
- Technology Upgrades: Introducing digital platforms like ULIP and adopting IT solutions for last-mile delivery optimization.
- Skill Development: Training the workforce in modern logistics technologies through initiatives like PMKVY.
- Operating & Regulatory Environment:
- Aligned Policies: States/UTs are encouraged to develop logistics policies in line with national goals.
- Regional Focus: Enhancing city-level logistics with dedicated freight zones and developing regional trade corridors.
- Single-Window Clearance: Simplifying approvals for logistics infrastructure and projects.
- Sustainable & Inclusive Logistics:
- Green Logistics: Promoting eco-friendly practices, reducing emissions, and supporting sustainable transport systems.
- Equity in Logistics: Encouraging women’s participation in the sector and developing inclusive career opportunities.
Conclusion
The logistics sector is a crucial driver of India’s economic growth. Realizing its full potential requires clear policies, digitalization, and sustainable practices. States/UTs must prioritize green initiatives, skill development, and cost-reduction measures, with defined timelines and measurable KPIs.
