Third Anniversary of the National Logistics Policy (NLP)

Three Years of India's National Logistics Policy: Measuring Gains, Addressing Gaps

On September 17, 2025, India marked the third anniversary of its National Logistics Policy (NLP), a framework aimed at reducing logistics costs to below 10% of GDP and improving India's ranking in the Logistics Performance Index (LPI) to the top 25 by 2030. While DPIIT celebrated milestones such as India’s improvement to the 38th position in the 2023 LPI, the question remains: are we truly on track for transformative change?

The NLP and Its Mechanisms

Introduced in 2022, the NLP has sought to address India's longstanding logistics inefficiencies through a cross-sectoral approach. From the PM GatiShakti Master Plan to the Unified Logistics Interface Platform (ULIP), several institutional instruments have been rolled out:

• Unified Logistics Interface Platform (ULIP): Integrated over 30 digital systems, facilitating 100 crore API transactions as of 2025.
• Dedicated Freight Corridors (DFC): Pioneered by the Ministry of Railways to reduce rail congestion and transport costs.
• Multi-Modal Logistics Parks (MMLPs): Planned at 35 sites nationwide, with five expected to be operational by 2027.
• Inland Waterways Authority of India (IWAI): Recorded cargo movement of 145.5 million tonnes in 2024–25, expanding operational national waterways from 24 to 29.

These efforts align with broader ambitions to create an integrated logistics ecosystem. The budgetary commitment is supported by sector-specific initiatives such as Gati Shakti Vishwavidyalaya (GSV), which recently partnered with 40 institutions to develop skilled manpower.

The Case For: Tangible Improvements

Certain achievements of the NLP are commendable. Take India's rise in the LPI from 44th in 2018 to 38th in 2023—a strong indicator of improved efficiency in customs clearance, infrastructure availability, and timeliness. ULIP has emerged as a cornerstone; its seamless integration across ministries has enhanced visibility in cargo movements, saved time, and minimized red tape.

Moreover, growth in inland waterways usage is notable. With cargo movement touching 145.5 million tonnes and the expansion of national waterways to 29, the dependence on carbon-intensive road transport could substantially decrease. Similarly, DFCs offer encouraging early results in reducing freight costs by up to 30%, which could shift freight transport away from overburdened road networks.

On the macro scale, India’s logistics sector—valued at USD 215 billion in 2021—is projected to grow at a robust Compound Annual Growth Rate (CAGR) of 10.7% till 2026, creating 1 crore new jobs by 2027. This aligns not just with domestic goals but also with India's global competitiveness in manufacturing and trade.

The Case Against: Persistent Challenges

Yet, significant hurdles remain. India's logistics costs currently hover around 13–14% of GDP, well above global standards such as the US, where logistics costs are 8% of GDP. This continues to undermine export competitiveness, particularly for sectors like textiles and agricultural products. The irony here is that policies like PM GatiShakti and MMLPs aim at multimodal integration, yet India's freight transport remains overwhelmingly road-dependent, accounting for more than 65% of transportation volume.

Infrastructure gaps, especially in warehousing and cold storage, exacerbate inefficiencies in agricultural supply chains, resulting in up to 30% post-harvest losses annually. Further, while DFCs promise cost reduction, their completion timeline remains uncertain—the Eastern and Western corridors have seen years of delay due to land acquisition disputes and bureaucratic bottlenecks.

The reliance on diesel-based trucking raises another issue: environmental sustainability. Although Rail Green Points may incentivize eco-friendly freight options, the logistics sector still contributes disproportionately to carbon emissions. The scalability of environmentally conscious initiatives remains unclear.

What Can India Learn? Case Study: Germany

Germany, ranked seventh in the 2023 LPI, offers a pointed comparison. Its logistics efficiency stems from a balanced multimodal freight system: 28% of freight transport is conducted via rail, 10% via waterways, and the remainder through roads. Investments in linked cold storage infrastructure and green transport technologies have solidified its position.

The German Freight Transport and Logistics Action Plan explicitly segments funds for regional cold chain infrastructures and incentivizes freight operators to upgrade to low-carbon technologies. Additionally, Germany’s fluid bureaucratic processes—a stark contrast to India's fragmented interministerial coordination—have helped streamline freight approvals.

Where Things Stand

So far, the NLP’s successes have been largely operational. ULIP’s API integrations, IWAI’s expansion of waterways, and early DFC wins show the policy’s potential. However, the structural weaknesses—road dependency, unwieldy logistics costs, and environmental gaps—remain unresolved.

More critically, while a data-driven ecosystem is a stated priority, its penetration among state-level actors is inadequate. Much depends on how effectively schemes such as GatiShakti Vishwavidyalaya produce a logistics workforce capable of bridging the skill gaps. These issues will determine whether the NLP can fulfill its promise—or flounder under fragmented execution.

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