Strengthening India's Logistics Sector for Global Competitiveness

growth of small and medium-sized enterprises (SMEs)

Efficient Logistics India is emerging as an attractive destination for global multinational companies seeking to diversify their manufacturing operations. Efficient domestic logistics play a pivotal role in enhancing both national and international trade competitiveness. The rapid improvement of logistics infrastructure, including last mile delivery, growth of small and medium-sized enterprises (SMEs), and favourable government policies will enable the country to secure a larger share in the global manufacturing value chain. These factors serve as key drivers for the economy's transformative growth.

As the 2024-25 Budget looms ahead, heads of companies share their expectations:

Rampraveen Swaminathan, MD & Chief Executive Officer, Mahindra Logistics Ltd.

The upcoming interim budget offers a unique opportunity to balance economic growth priorities and fiscal consolidation. Prioritizing capital expenditure in key infrastructure projects, alongside financial incentives like PLI, tax benefits, and subsidies, can drive innovation in logistics. Building a 'One India' logistics ecosystem and integrating initiatives like the National Logistics Policy and Sagarmala Project are crucial to enhancing India’s global Logistics Performance Index ranking.

To reinforce India's potential as a manufacturing powerhouse, the budget needs to focus on domestic manufacturing and prepare the logistics sector for service integration, growth in fulfilment logistics, and multi-modal transportation adoption. The government should also consider automation investments, especially in technologically advanced warehouses, which can position India as a logistics innovation leader.

Kami Viswanathan, President – MEISA, FedEx Express

FedEx advocates for a strategic allocation towards infrastructure development for more efficient multimodal logistics. Additionally, we emphasize a focus on digitization in the logistics sector to accelerate speed and ease of doing business. Recognizing the impact of the National Logistics Policy and PM Gati Shakti National Master plan, alongside prioritizing road, sea, and rail cargo infrastructure, we see the expansion of airports as exciting avenues for growth. We urge a consistent budgetary emphasis on expanding airport infrastructure for cargo, strengthening regional airports and developing dedicated transhipment hubs to optimize belly and freight capacities. As India targets lowering of logistics costs and a top 25 global rank by 2030, we anticipate budget initiatives that will sustainably boost manufacturing and trade, particularly benefiting and incentivizing SMEs. We also anticipate initiatives towards greater trade facilitation and further fostering a business-friendly environment aligning with the USD 5 trillion economy goal.”

Sandeep Kulkarni, Chief Operating Officer, Allcargo Gati Limited

The logistics industry requires a robust infrastructure and policy push from the interim budget to build superior operational and efficiency to meet the growing demand and enhance overall competitiveness in the global logistics landscape. As the growth of the digital economy is driving e-commerce progress, the budget should propose measures, provisions or policy support which will encourage new-age data-driven technology adoption to enhance supply chain agility, responsiveness and resilience. With environmental sustainability emerging as a dominant theme in the logistics and supply chain industry and more and more logistics companies adopting the principles of green logistics, the interim budget needs to propose incentives to encourage renewable energy adoption, EV deployment, etc.

Anil G Verma, CEO and Executive Director, Godrej & Boyce

We expect the Government to continue its support to capex led projects, infrastructure improvements and PLIs, as budgeted. Further, the Government must take steps to accelerate the growth of its rural economy by providing suitable enablers. Additionally, the spends on targeted welfare measures for the underprivileged need to continue. India needs to grow across all segments and strata of society.