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India's vision to become a $30 trillion economy by 2047 by focussing on multimodal logistics across road, rail, port and air networks on a single digital platform
Dr. Prashant Prabhakar Deshpande has post-graduated in Economics with a Gold Medal in 1976 and was awarded a Ph.D in Social Sciences from Nagpur University in 2007.
Introduction
The high cost of logistics due to poor infrastructure and efficiency is said to be on the radar of the Indian Policy makers for the past few years.
Taking note of this concern, Budget 2025 underlined that Supply Chain & Logistics are fundamental to all the 4 major engines of growth viz. Agriculture, MSME, Investment & Exports. Higher cost in this sector has been considered the biggest hurdle in India's aspirations to become a hub of global manufacturing. Changes are therefore being planned to further fuel India's growth re-affirming India's position as the fastest growing major economy in the world.
India's vision to become a $30 trillion economy by 2047
With an aim to become a $30 trillion economy by 2047 Indian government has been laying the groundwork for an ambitious transformation of its logistics ecosystem with a focus on reimagining infrastructure development to create a smart, interconnected logistics network that can:
Dramatically reduce transport costs;
Enhance supply chain efficiency, and;
Support sustainable and equitable economic growth.
Nations's current freight logistics scenario
Current Scenario:
Road transport:
India's freight logistics model is heavily skewed towards road transport accounting for nearly 60% of the cargo movement. Although the model is critical for last-mile connectivity, it is considered economically and environmentally inefficient for long-haul freight.
Rail Transport
Rail transport, although inherently safer and more cost-effective for bulk goods, carries just 25% of the total cargo;
Inland Waterways:
Inland waterways although offer vast untapped potential, at present remain grossly underutilised.
The government feels this scenario keeps the logistics costs in the country at a staggering 14–18% of GDP, almost double that of the developed economies, the resulting inefficiency acting as a drag on the manufacturing competitiveness and export agility.
Government's National Master Plan envisioning multimodal logistics
The government in response is reportedly driving a Policy and Infrastructure Overhaul anchored by the PM Gati Shakti National Master Plan envisioning multimodal logistics. It must be noted that it is for the first time that National Infrastructure Planning is being executed in a coordinated, data-backed manner:
Minimising overlap, and;
Enabling targeted investments where they are needed most.
Progress under the National Master Plan
Railways:
Indian Railways, one of the largest players in the transformation, has accelerated capacity expansion along high-density corridors since 2014 fast-tracking strategic projects linking ports, manufacturing clusters, and mining belts. The commissioning of Dedicated Freight Corridors (DFCs) on both the Eastern and Western routes is said to be already delivering results:
Improving freight speed, and;
Freeing up existing tracks for faster passenger train movement.
Simultaneously:
Multi-modal logistics parks are being developed to serve as integrated hubs for road, rail, and port connectivity.
These centres are envisioned as the future-ready logistics engines of the economy:
Cutting down cargo handling time;
Optimising warehousing, and;
Streamlining inventory flow.
Additional features include:
Digital freight tracking;
Automated customs processes, and;
Climate-resilient infrastructure.
Technology too is said to be reshaping logistics with:
Artificial Intelligence with the computational systems to perform tasks typically associated with human intelligence such as, learning, reasoning, problem solving perception & decision making, predicting freight flows;
with the computational systems to perform tasks typically associated with human intelligence such as, learning, reasoning, problem solving perception & decision making, Blockchain , a distributed ledger with growing lists of records that are securely linked together via cryptographic hashes transforming cross-border documentation, and;
, a distributed ledger with growing lists of records that are securely linked together via cryptographic hashes and; GPS-based cargo tracking standardising visibility and accountability across the value chain.
It seems, it has been realised, digitisation no longer is a choice but is the backbone of efficient, sustainable logistics.
Importance of Reform in human capital & governance
However, human capital and governance reform are considered equally vital to maintain momentum ensuring:
A skilled logistics workforce;
Uniform rules across states, and;
Faster digital approvals.
Epilogue
The government's stated goal is to bring logistics costs down to 12% of GDP by 2030 and aligning it with the global standards of 8% or less by 2040.
It is opined, achieving this, will not only reduce operational costs for businesses, but also:
Support exports;
Improve the ease of doing business, and;
Enable inclusive employment generation in Tier-II and Tier-III cities.
Building upon transformational initiatives like the PM Gati Shakti, the National Logistics Policy (NLP), Logistics Efficiency Enhancement Programme (LEEP), development of Dedicated Freight Corridors (DFCs), Bharatmala Pariyojana, Sagarmala programme, formulation of the National Rail Plan (NRP), Multi-Modal Logistics Parks, National Infrastructure Pipeline and Jal Marg Vikas Project, the Government has been introducing cohesive policies that are aimed at reducing logistics costs.
It is opined this strategic focus demonstrates government's stronger commitment to tackling long-standing challenges such as:
Fragmented networks;
Underdeveloped infrastructure, and;
Underuse of technology.
Aligning logistics reforms with economic planning is said to make Budget 2025 a crucial turning point in India's effort to boost global competitiveness and drive sustainable growth.
As India charts its path towards its Centennial economic vision, logistics infrastructure will be the foundation. It is however opined, to truly realise this vision, the infrastructure:
Must be smart;
Sustainable, and;
Synchronised.
It is opined the Policy & government's resolve in its implementation are steering India in the right direction.
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Views expressed above are the author's own.
