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13 percent or 8 percent? Why India’s logistics cost has two numbers

Published 6 November 2026

For years, every discussion of Indian logistics began with the same figure: logistics cost 13 to 14 percent of GDP, far above the 8 percent seen in developed economies. In September 2025, a study by the Department for Promotion of Industry and Internal Trade (DPIIT) and the National Council of Applied Economic Research (NCAER) put the figure at 7.97 percent of GDP for 2023-24. Both numbers are quoted, and they seem to contradict each other. They do not, because they were never measuring the same thing.

Two different measurements

The old 13 to 14 percent was not a measurement. It was an estimate built from other countries’ models.

The two sources most often cited are Armstrong and Associates, which put logistics cost at 13 percent of GDP for 2016 using a neural network model, and AVALON Consulting for the Confederation of Indian Industry, which put it at 10.9 percent of gross value added for 2015. Neither was based on a systematic survey of Indian firms or Indian data. They were adapted from international models, and they were repeated so often that they hardened into fact.

The new 7.97 percent is a measurement. The DPIIT-NCAER study, titled Assessment of Logistics Cost in India and published in September 2025, is described as India’s first systematic assessment of logistics cost. It used a hybrid methodology: primary data from more than 3,500 industry stakeholders, combined with secondary data from the Ministry of Statistics and Programme Implementation (MOSPI), the Reserve Bank of India (RBI), and the Goods and Services Tax Network (GSTN). On that basis it put logistics cost at 7.97 percent of GDP and 9.09 percent of non-services output for 2023-24. In absolute terms, the total cost was estimated at 24.01 lakh crore rupees.

The two numbers are not directly comparable. One is an adapted estimate from 2015-16. The other is a systematic measurement from 2023-24. You cannot subtract one from the other and call the difference an improvement.

What the new number does and does not say

The 7.97 percent is a baseline, not a trend. Because it is the first systematic assessment, there is nothing earlier on the same method to compare it with. It tells us what logistics cost was in 2023-24 on this definition. It does not tell us how much it fell, because the old figure was measured differently.

That is why our policies tracker does not present “target already met” as settled fact. The National Logistics Policy promised to bring logistics cost down to about 8 percent by 2030. The new measurement happens to sit just below that. But the measurement itself is new, and the method is new, so the honest reading is that India now has a proper baseline, not that the target is already in the bag.

The average also hides a wide spread. The same study found that firms with turnover below 5 crore rupees spend nearly 17 percent of the value of their output on logistics, while large firms spend about 7.6 percent. For a small firm, logistics is still a heavy cost. The national average is pulled down by the large firms that move the most freight.

What has actually improved

None of this means nothing changed. The things that move logistics cost have genuinely improved, and they are measurable on their own terms.

India’s rank in the World Bank Logistics Performance Index rose from 44th in 2018 to 38th in 2023, against a target of a top-25 rank by 2030. The goods and services tax and the e-Way Bill cut the friction of moving goods across state borders. Dedicated freight corridors, the Unified Logistics Interface Platform, and the PM Gati Shakti master plan have made freight movement faster and more predictable.

Those are real gains. They just cannot be read off the difference between 13 percent and 7.97 percent, because that difference is mostly a change in how the number is made.

Sources

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Updated 9 November 2026