India’s logistics cost reduced by 10.7% of GDP due to investment in infra development: Report

India’s logistics cost has dropped to 10-10.7 per cent of GDP in the Financial Year 2026, according to a report, due to a cumulative investment of $360 billion in infrastructure development.

According to the CII-Knight Frank report, the cost has fallen from 13-14 per cent of GDP a decade ago, translating into annual savings of $123-133 billion for the economy.

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India’s position in the global Logistics Performance Index (LPI) improved from 54th in 2014 to 38th in 2023, the report said.

As a result of these sustained efforts, India’s logistics ecosystem has improved considerably, contributing to enhanced connectivity, trade facilitation, and supply chain performance.

The report said continued overdependence on road transport for freight movement, delays in developing integrated MMLPs, and inadequate first- and last-mile connectivity continue to limit the shift of cargo movement toward rail and other efficient modes of transport.

The report stated that despite these improvements, India’s logistics supply chain is yet to achieve optimal efficiency, and multimodal logistics parks (MMLPs) are central to improving India’s logistics efficiency.

“India will require 216 MMLPs, each with an average capacity of 16–17 MT per annum, to achieve its 2047 freight modal shift targets,” it added.

“The core challenge is no longer an infrastructure deficit, but a lack of connective nodes. MMLPs are the essential connective tissue required to convert rail’s line-haul cost advantages into door-to-door competitiveness. By aggregating fragmented, sub-threshold cargo, MMLP-grade interchange unlocks a monumental 43% total cost advantage over road freight on DFC corridors,” said Ashwani Gupta Chairman, CII National Committee on Ports and Shipping and Whole Time Director & CEO, Adani Ports and SEZ.

“Simultaneously, MMLPs compress terminal origin-side dwell times by over 90% and drastically reduce handling damage, transforming rail into a time-predictable, reliable logistics channel for high-growth, non-bulk sectors like FMCG, automotive, and e-commerce. To achieve the National Rail Plan’s target of a 45% freight modal share by 2047, India must aggressively scale its intermodal network,” he added.

Key policy measures identified by the report to accelerate private sector participation in MMLPs include fast-tracking project implementation, creating anchor demand through industrial clustering and freight aggregation, and addressing critical first- and last-mile connectivity gaps, the report suggested.

It also underlines the need for stronger multimodal integration, policy coordination, and long-term infrastructure planning to build a resilient, efficient, and future-ready logistics ecosystem for India.