Archive · 27 Jan 2026
India's Logistics Costs and Budget 2026
Some people think India's logistics costs are very high, but that's not true.
The World Bank's ranking doesn't tell the whole story because it only looks at international shipping, not the whole journey.
India's actual logistics costs are lower than many other countries, like Thailand and South Korea.
Also, people think services don't need much logistics, but that's changing because services like digital ones need a lot of infrastructure.
Bad roads and high taxes make logistics more expensive in some parts of India, like the Northeast.
India can improve by fixing these problems and measuring costs better.
The upcoming Budget 2026 is expected to focus on scaling up investment in port connectivity, dedicated freight corridors, and export-oriented logistics parks to support exports and cross-border supply chains.
Improving logistics efficiency is seen as crucial for India's global competitiveness.
India's logistics cost is 7.97% of GDP, lower than many other countries like Thailand (14.1%) and South Korea (13.5%).
The World Bank Logistics Cost Index (WBLCI) only measures international shipping, not domestic logistics, leading to misconceptions about India's logistics costs.
India's services sector is not as dominant as perceived, with a 49.9% share in GDP, below the average for lower middle-income economies.
Services like digital ones require significant logistics infrastructure, challenging the myth that services are logistics light.
Poor roads and high taxes increase logistics costs in regions like Northeast India, with road transportation costing 50% more than in other regions.
- Who
- India's logistics and economic analysts, YCH India's Country General Manager Jossy Sebastian
- What
- Debunking myths about high logistics costs in India and expectations from Budget 2026
- When
- Published on January 26-27, 2026
- Where
- India
- Why
- To correct misconceptions about logistics costs, their impact on the economy, and to discuss infrastructure-led growth
- India's Logistics Cost
- 7.97% of GDP (2023-24)
- Thailand's Logistics Cost
- 14.1% of GDP (2023)
- South Korea's Logistics Cost
- 13.5% of GDP (2023)
- Indonesia's Logistics Cost
- 14.3% of GDP (2023)
- China's Logistics Cost
- 14.4% of GDP (2023)
- India's Services Share in GDP
- 49.9% (2024)
- World Bank Logistics Cost Index (WBLCI) Rank
- 38th (2023)
- India's Logistics Policy Target
- 8% of GDP by 2027
