New Delhi: The railways are the most cost-efficient mode to transport goods, involving a cost of Rs 1.96 for moving every tonne of cargo for every one-kilometre stretch, while airways are the costliest, transporting cargo at Rs 72 per tonne per km, says a Department for Promotion of Industry and Internal Trade (DPIIT) report.
After railways, cargo transport by waterways is the least expensive, involving a cost of Rs 2.3 per tonne of cargo transported every 1km, followed by roadways’ transport, which entails Rs 3.78 per tonne per kilometre, according to the report, Assessment of Logistics Cost in India.
The National Council of Applied Economic Research (NCAER) prepared the report for DPIIT, and it was released Wednesday.
For railways, freight charges accounted for the largest share of total costs—89.8 percent. Basic freight charges of 79.3 percent and surcharges of 10.5 percent were part of the 89.8 percent share. The remaining costs included weight charges, terminal-handling fees, and route-specific levies.
For road transport, costs varied by truck capacity. For context, a heavy-duty truck with 55-tonne capacity would cost Rs 1.51 per tonne per kilometre, while transporting cargo in light trucks (low axle) would cost Rs 11.03 per tonne per kilometre.
For the Government of India, this is the first comprehensive study to calculate logistics costs in India. In the Financial Year (FY) 2023-24, it was estimated to be 7.97 percent of the Gross Domestic Product (GDP). The aggregate cost is estimated to be around Rs 24 lakh crore at current prices for FY 2023-24.
The report highlights the decline in logistics costs in FY 2023-24, down from 8.84 percent of GDP in FY 2022-23 and 8.79 percent of GDP in FY 2021-22.
DPIIT officials say that the current study will allow a more accurate determination of logistics costs. Often, erroneously, these have been estimated to be 13 or 14 percent.
According to the report, India’s logistics costs are lower than those of the United States and China. US logistics costs are estimated to be 8.8 percent of the country’s GDP, according to the 2025 State of Logistics Report by the Council of Supply Chain Management Professionals (CSCMP). China’s logistics costs in 2023 were estimated to be 4.4 percent of its GDP, down from 18 percent in 2012.
However, DPIIT officials cautioned against comparing India’s logistics costs with those of other countries due to the different methodologies of calculation and components of GDP.
This study is part of the National Logistics Policy 2022, a uniform framework that the government aims to formulate for measuring logistics costs and benchmarking them against global best practices.
The report captures logistics costs in India based on firm size—the smaller the firm, the higher the logistics cost.
“Small firms with a turnover of up to Rs 5 crore incur the highest logistics cost as a percentage of their output. Their logistics cost is estimated at 16.9 percent of their output,” the report states.
For firms with turnovers of Rs 250 crore or above, logistics costs reduce to an estimated 7.6 percent of the output.
The report has been compiled by the NCAER using a hybrid methodology that combines secondary data with nationwide surveys.
(Edited by Madhurita Goswami)
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