Govt launches framework to derive logistics cost for India

The government on Saturday said a framework has been prepared to scientifically derive the estimate of logistics costs of the country.

This initiative follows the mandate of the National Logistics Policy to establish a uniform framework for measuring logistics costs and benchmarking scientifically derived estimate of the cost.

“For the first time, India will have a comprehensive and scientifically derived estimate of logistics costs, using a hybrid methodology that combines secondary data with nationwide surveys,” the Commerce and Industry Ministry said.

Until now, logistics costs in India were often misrepresented, with commonly cited figures of 13-14 per cent of GDP derived from external studies or partial datasets.

This led to inconsistent estimates, causing confusion among policymakers and global stakeholders, it said, adding that as per the current assessment prepared by NCAER for DPIIT, logistics costs in India are estimated about 7.97 per cent of the total GDP.

A report in this regard was released by Commerce and Industry Minister Piyush Goyal. The report provides a comprehensive framework by capturing logistics costs across different transport modes, product categories, and firm sizes. It also presents estimates of freight cost per tonne-kilometre and highlights the role of multi-modality in enhancing efficiency.

“By providing evidence-based guidance, the study strengthens India’s efforts to improve competitiveness and supports the broader vision of positioning the country as a global logistics hub,” the ministry said.

Goyal also launched the Industrial Park Rating System (IPRS) 3.0.

Developed by the Department for Promotion of Industry and Internal Trade (DPIIT) with support from the Asian Development Bank (ADB), the initiative aims to further strengthen India’s industrial ecosystem and enhance the competitiveness of industrial infrastructure.

The government is developing 20 plug-and-play industrial parks and smart cities under NICDC, with four already completed, four under active construction, and the remaining at various stages of bidding and tendering.

He added that the launch of IPRS 3.0 will help assess and benchmark facilities, infrastructure, and competitiveness of industrial parks across the country.

Under IPRS 3.0, industrial parks will be benchmarked and categorised as Leaders, Challengers, and Aspirers based on their performance across key indicators.

This will provide investors with transparent and credible information, foster healthy competition among states and Union Territories, and guide policymakers in designing targeted interventions, it said.