As India gears up for the announcement of its Union Budget for 2024, the logistics sector is poised with high hopes and expectations. This sector, essential to the nation’s economic framework, looks forward to transformative measures that will support India’s ambitious goal of becoming a USD 5 trillion economy. Key industry leaders have outlined their priorities and expectations for the upcoming budget, emphasising infrastructure investment, technological advancement, and regulatory streamlining.
Logistics Industry As Catalyst For India’s $7 Trillion Economy
Ketan Kulkarni, Chief Growth Officer at Allcargo Group, highlights the critical role of the logistics industry in India's aspiration to become a USD 7 trillion economy. He states, "The logistics industry is set to play the role of a growth catalyst which will usher in the new era of economic progress. For that, the logistics industry requires consistency in policy, technology, and infrastructure-led reforms."
Kulkarni applauds the NDA government's emphasis on continuity and stability in decision-making, as reflected in their third consecutive term. He underscores the transformative impact of the National Logistics Policy and PM Gati Shakti National Master Plan, advocating for continued infrastructure development and fiscal stimulus in the full Budget to bolster the industry's competitiveness and sustainability. Kulkarni emphasises the need for a holistic approach, including measures to increase emobility and renewable energy adoption, to align with India's goal of carbon neutrality by 2070. He concludes that a dedicated focus on sustainability will help the logistics sector adopt green practices, contributing significantly to the 'Viksit Bharat @2047' mission.
Multi-Modal Connectivity And Trade Facilitation
Kami Viswanathan, President of FedEx MEISA, expressed the need for significant investments in multi-modal connectivity, including advanced air cargo terminals and infrastructure enhancements to create seamless trade corridors. "In the forthcoming budget, FedEx looks forward to transformative measures to accelerate growth in the logistics sector and propel India towards its USD 5 trillion economy goal," she stated. Viswanathan also highlighted the importance of trade facilitation, streamlining, and digitising clearance processes to minimise delays and enhance cargo movement efficiency. She affirmed FedEx's commitment to collaborating with the government to advance these strategic initiatives and support India’s trade growth.
Continued Investment In Logistics Infrastructure And MSME Support
Gregory Goba Ble, Managing Director of UPS India, underscored the pivotal role of the upcoming budget in shaping India’s logistics revolution. Building on the foundations laid by previous budgets, Goba Ble stressed the need for continued investments in critical transport infrastructure to establish last and first-mile connectivity. "This budget must continue its commitment to boosting the logistics sector, particularly for MSMEs. Providing these businesses with timely access to finance, cutting-edge technologies, and relevant training is essential for them to compete on a global scale," he noted. Goba Ble also called for incentives to promote the adoption of advanced technologies in the logistics sector, which would enhance efficiency and contribute significantly to India's logistics performance index.
Reduced Logistics Costs And GST Cuts
Siddhartha Bhagat, Head of the Logistics Division at Seros, reflected on the ambitious goals set by the National Logistics Policy in 2022 under the PM Gati Shakti National Master Plan. He emphasised the need to reduce logistics costs from 14% of GDP to 8%-10% of GDP and focus on infrastructure development for faster turnaround times and seamless movement of goods. Bhagat highlighted the potential of India's vast coastline and internal waterways in pushing for multimodal logistics, integrating local and global supply chains. Additionally, he suggested reducing GST rates on heavy commercial vehicles (HCV) and medium commercial vehicles (MCV) for electric vehicles (EV) and alternate fuels to encourage the industry’s transition to cleaner energy sources.
Adoption Of Cutting Edge Technologies
Zaiba Sarang, Co-founder of iThink Logistics, expressed optimism about the forthcoming budget, emphasising several key areas for improvement. She highlighted the importance of large infrastructural investments to enhance efficiency, such as building multimodal logistics parks and dedicated freight corridors. Sarang called for incentives to adopt cutting-edge technologies like AI and IoT for enhanced operations and transparency. She also stressed the need to streamline the GST system and promote sustainability through the use of electric vehicles and other eco-friendly initiatives. "Innovation and growth will also be fueled by assistance for SMEs, startups, and skill development, as well as by encouraging public-private collaborations and streamlining regulatory procedures," she stated.
Urge For Infrastructure Investment And Tech Adoption
Umang Gupta, Country General Manager of RX India, echoed the sentiment that the logistics sector is the backbone of the Indian economy. He pointed out the pressing need for transparency and traceability in the logistics sector, vital for the growth and sustainability of MSMEs. Gupta expects the upcoming budget to prioritise investments and schemes encouraging the adoption of uniform standards to streamline communication and boost overall efficiency. He highlighted the critical role of technology in boosting logistics performance through supply chain digitization, undertaken via public-private partnerships. Gupta called for the expansion of the Unified Logistics Interface Platform (ULIP) and leveraging the Ease of Logistics (ELOG) digital platform to streamline operations, making it simpler and more efficient for businesses to manage their logistics needs. Additionally, he advocated for standardised data formats and protocols across the industry to facilitate seamless information exchange and enhance international collaboration.
As the Union Budget 2024 approaches, the logistics sector looks forward to strategic initiatives and substantial investments that will drive efficiency, sustainability, and growth, ensuring that India remains competitive on the global stage.
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