How logistics parks are reshaping India’s $5 trillion economy vision

The country has made significant strides in connectivity, logistics, and transportation efficiency, fuelling its vision of becoming a $5 trillion economy. (Representative image)

By Ramanathan Rajamani

India’s infrastructure landscape has undergone a transformational shift over the past decade, laying the foundation for unprecedented economic growth and global competitiveness. The country has made significant strides in connectivity, logistics, and transportation efficiency, fuelling its vision of becoming a $5 trillion economy. The National Highway network has expanded by approximately 60%, growing from 91,287 km in 2014 to 146,195 km by 2024, improving cargo transportation efficiency and regional connectivity. Indian Railways has electrified 97% of its Broad-Gauge network, covering 64,421 route kilometres as of November 2024, significantly reducing logistics costs and enhancing sustainable transport. Meanwhile, Metro Rail networks have expanded from 248 km in 2014 to 945 km in 2024, transforming urban mobility and reducing congestion in major cities.

India’s aviation sector is also witnessing exponential growth, reinforcing its role in national and international trade. Under the UDAN scheme, 619 routes have been operationalized, benefiting over 1.5 crore passengers and making air travel more accessible to previously underserved regions. The number of operational airports has surged to 159, up from 74 in 2014, with 50 new airports planned over the next five years. These developments are crucial to enhancing regional connectivity and strengthening India's position as a major player in global trade.

To support this rapid expansion and streamline trade operations, modern logistics parks are emerging as vital enablers of economic efficiency. These state-of-the-art facilities are designed to enhance supply chain operations by integrating warehousing, cargo handling, and multimodal transport networks. With global trade becoming more competitive, such logistics hubs are now essential in reducing costs, optimizing freight consolidation, and improving last-mile delivery services.

Strategically located logistics parks serve as centralized hubs for storage, distribution, and value-added services, allowing businesses to optimize operations and minimize costs. Their role is particularly crucial for industries such as manufacturing, e-commerce, pharmaceuticals, and agriculture, where efficient cargo movement and cold chain logistics ensure speed, quality, and cost savings. For the EXIM (Export-Import) community, logistics parks facilitate faster customs clearance, reducing delays and improving shipment timelines. E-commerce and retail industries benefit from seamless inventory distribution and enhanced last-mile connectivity, ensuring swift order fulfilment. Similarly, agriculture and perishables industries gain from integrated cold chain solutions that preserve product quality and reduce post-harvest losses.

A defining feature of modern logistics parks is their integration with multimodal transport infrastructure. With the Dedicated Freight Corridors (DFCs) nearing full operational capacity, cargo transit times are expected to reduce by up to 50%, while logistics costs could decline by 30%. This ensures faster, cost-effective cargo movement through optimized air, rail, road, and sea connectivity. Additionally, the Sagarmala Initiative, which focuses on port modernization and coastal infrastructure development, is playing a crucial role in strengthening India’s global trade capabilities by boosting EXIM logistics efficiency.

India’s current logistics costs account for 14% of GDP, significantly higher than global benchmarks (China: 8%, US: 9%). To bridge this gap, the National Logistics Policy (NLP) aims to reduce this to 8% by 2030, making Indian products more competitive in global markets. Advanced logistics parks, such as the AISATS BLR Logistics Park, contribute directly to this vision by integrating smart technologies like AI-driven cargo tracking, RFID-based logistics management, and automated warehousing solutions, ensuring seamless cargo movement and reducing supply chain inefficiencies.

As India continues its infrastructure boom, logistics parks will be the backbone of its aviation and supply chain network. These facilities are set to play a pivotal role in enhancing operational efficiency, improving trade competitiveness, and supporting economic growth.

In an era where logistics efficiency directly influences global competitiveness, India’s expanding network of logistics hubs is not just supporting the country’s trade ambitions, it is driving a new paradigm of economic progress. By bridging infrastructure gaps, reducing trade barriers, and facilitating seamless cargo movement, these developments are laying the foundation for India’s emergence as a leading global trade and logistics powerhouse.

(Ramanathan Rajamani, CEO, AISATS.)

Views are personal, and do not represent the stance of this publication.