What’s On The Logistics Industry’s 2024-25 Budget Wishlist? Let’s find Out.

As Finance Minister Nirmala Sitharaman prepares to present the full budget for the ongoing financial year on July 23, anticipation is building around potential announcements. Experts predict that Budget 2024 will aim for a balanced approach, as hinted in the Interim Budget 2024–25, which was presented by the FM on February 1.

Expected to be an extension of the temporary financial plan, the upcoming budget is predicted to focus on empowering the poor, farmers, youth, and women. The government’s priority areas are expected to include sustainability, innovation, strategic partnerships, and infrastructure development. Significant announcements related to infrastructure development, crucial for economic growth, are highly anticipated.

The logistics and supply chain fraternity, which has welcomed the interim budget with open arms, believes that the government’s vision for India aligns strongly with the industry’s aspirations. Now the sector is expecting the government to further its steps in this direction and support the growth of the industry, by focusing on the previously laid policies like ULIP, National Logistics Plan, PM Gati Shakti Plan, PLI Scheme, etc. Along with this, the industry also anticipates the center to take steps towards sustainability, Technology, and Skill development.

Mr. Ketan Kulkarni, Chief Growth Officer, Allcargo Group, succinctly captures the gist of the logistics and supply chain industry’s expectations from the Union Budget.

He says, “As India is aspiring to become a $7 trillion economy, 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. It is extremely encouraging to note that the NDA government, in its third consecutive term, has emphasized continuity and stability in decision-making and policy measures, and we expect a reflection of that intent in the full budget.

The logistics industry is on the cusp of technological transformation and structural transition, thanks to the launch of the National Logistics Policy and the PM Gati Shakti National Master Plan. The foundation has been laid to further strengthen the logistics competitiveness of our country so that it becomes a key global manufacturing hub and investment destination.

The full budget needs to continue with the infrastructure push to add momentum to the transformation-led growth. The logistics industry requires a holistic infrastructure development push to build a stronger distribution network and global value chain linkages. Along with infrastructure development, the budget should announce fiscal stimulus to boost the entrepreneurial ecosystem and create employment opportunities to drive consumption.”

Infrastructure

In her Interim Budget speech, Sitharaman articulated a vision for ‘Viksit Bharat’—a prosperous India in harmony with nature with modern infrastructure, providing opportunities for all citizens and regions to reach their potential.

In the upcoming budget, the industry expects the center to move ahead in there commitment and enhance the nation’s infrastructure developments.

“As India progresses towards becoming a $7 trillion economy by 2030, stable and consistent policy making will be instrumental in achieving this target. A higher allocation of infrastructure spend towards the Ministry of Roads, Transport, and Highways would enhance the quality of highways, both state and national, facilitating smoother and quicker transit times for all, said Mr Dhruv Taneja, Founder and CEO, MatchLog Solutions.

Mr. Arun Shukla, President and Director, JK Lakshmi Cement, “At JK Lakshmi Cement, we eagerly anticipate the Union Budget 2024 to further propel India’s development initiatives. As a key player in the construction materials domain, we hope the government will prioritize robust budgetary allocations and policy measures to bolster projects across the country. We welcome the Government of India’s commitment to fostering growth, sustainability, and inclusivity. The significant increase in infrastructure outlay to INR 11.11 lakh crores and the emphasis on green growth demonstrate the government’s pursuit of economic excellence.

Aligned with the vision of ‘Viksit Bharat’ by 2047, we remain committed to contributing to the nation’s economic excellence while creating opportunities across the ecosystem through accelerated growth.”

The industry is clearly expecting the government to further its initiatives based on established policies like the National Logistics Policy and the PM Gati Shakti National Master Plan.

Mr. Siddhartha Bhagat, Head, Logistics Division, Seros,”The National Logistics Policy in 2022 under PM Gati Shakti National Master Plan had already laid out the key objectives. The logistics industry is the pillar of any economy, and again, there are high expectations from Budget 2024. The primary aim is to reduce logistics costs from 14% of GDP to 8%–10% of GDP. Further, there should be a focus on infrastructure development for faster TAT and seamless movement of goods. India, with its vast coastline and internal waterways, has huge potential in the push for multimodal logistics, thereby developing and integrating the local and global supply chain.”

Skill Development, Technology, and Sustainability

The logistics and supply chain industry eagerly anticipates a strong focus on three critical areas: skill development, technological advancement, and sustainability. Industry leaders are voicing their expectations, hoping for a budget that not only addresses current challenges but also sets the stage for long-term growth.

The emphasis on sustainable and resilient development is echoed by many industry experts. With growing attention to creating a skilled workforce and advancing green technologies, the logistics sector is poised for rapid growth.

Ms. Smitha Shetty, Regional Director for APAC at Achilles Information Ltd., highlights India’s commitment to sustainability: “India’s unwavering commitment to achieving Net Zero emissions by 2070, reinforced by the interim budget’s comprehensive sustainability strategy, is a beacon for the global green economy. Proactive initiatives like the viability gap funding for 1 GW of offshore wind energy capacity and the ‘Muft Bijli’ rooftop solarization scheme are not merely steps towards a cleaner future but also catalysts for innovation and economic growth. At Achilles, we’ve witnessed firsthand how the emphasis on ESG adoption across businesses of all sizes is enhancing India’s competitive edge, attracting responsible investment from around the world. The upcoming budget is a crucial opportunity to further solidify this momentum, bolstering India’s position as a global leader in sustainable development.”

The industry also advocates for clarity and support for green measures while emphasizing the need for government intervention to drive greener practices.

Rohit Chaturvedi, Partner at Forvis Mazars in India, representing the Transport and Logistics sector, emphasizes “The government should focus on incentivizing the surface logistics industry to adopt greener practices. By offering tax benefits to companies embracing green technologies and establishing fiscal incentives for the development of charging infrastructure for commercial vehicles, the government can accelerate the industry’s transition toward sustainability. These initiatives not only support environmental goals but also position India as a leader in sustainable logistics, driving long-term economic and environmental benefits.”

Mr. Dhruv Taneja, Founder and CEO of MatchLog Solutions, said, “In addition, clarity and support for green measures, such as enabling the usage of biofuels, the adoption of commercial EVs, and the establishment of a supporting charging network, along with incentives to reduce carbon emissions in our sector, would be welcome additions. The introduction of a single-window portal could significantly enhance the chances of a common system for technology ideation and implementation, which would be a crucial enabler in reducing the cost of logistics in our country.”

Underscoring the importance of infrastructure investments and skill development Mr. Rampraveen Swaminathan, Managing Director and CEO of Mahindra Logistics Ltd. said, “Along with significantly boosting infrastructure investments, particularly in multi-modal transport and advanced warehousing, we expect a continued emphasis on green energy and strong EV infrastructure, accelerating our journey towards green logistics. Focus on automation and digitization across the logistics value chain will be crucial to achieving higher efficiencies and reduced costs. Addressing skill development in the sector is vital to meet the demands of modern logistics. Establishing a comprehensive regulatory framework to support the gig economy and formalize last-mile delivery employment should remain a priority in budget allocation. These initiatives will help establish a fair, inclusive, and innovative logistics landscape. At Mahindra Logistics, we are committed to building futuristic supply chains by connecting India through our nationwide network of integrated logistics solutions, ensuring tech-enabled and reliable deliveries across the country,” he added.

Highlighting the importance of technology and policy support, Mr. KK Agarwal, Chairman & Managing Director of CJ Darcl Logistics Ltd. said, “Looking ahead, we expect continued support for technology-driven solutions, skill development, and strategic incentives. The anticipated Union Budget will enhance multimodal connectivity and improve efficiency in the logistics industry. We also foresee comprehensive policies promoting electric vehicles, alternative fuels, and sustainable practices. These measures will boost economic growth in the logistics sector, aligning with the goal of a $5-trillion economy and a ‘Viksit Bharat’ by 2047. A robust Capex Budget is crucial to sustain and enhance this growth trajectory, positioning India as a logistics powerhouse.”

JB Singh, Director at MOVIN Express, emphasizes the need for upskilling and support for MSMEs: “Investments in upskilling programs for the workforce and targeted support for MSMEs will strengthen competitiveness and sustainability. This integrated approach not only promises to propel India’s logistics industry towards greater resilience but also supports the nation’s ambitions for inclusive growth and global leadership in logistics innovation.”

Railways

Referring to the Finance Minister’s announcement in the interim budget, Mr. Vivek Lohia, Managing Director, Jupiter Wagons Limited, emphasizes the importance of strategic initiatives in the rail sector.

He said, “This year’s Interim Budget unveiled a transformative vision for the rail sector, emphasizing strategic initiatives such as the Port Connectivity Corridor, the Energy, Mineral, and Cement Corridor, and the High Traffic Density Corridor. These corridors signify a pivotal step towards enhancing connectivity, driving economic growth, and ensuring passenger safety. With a focus on outcomes over outlays, the government underscores its commitment to timely delivery and cost-effective logistics solutions. Also, these are core infrastructures, and every penny invested in core infrastructure has a rebound effect on the economy. The announcement needs to be formalized into a bold stride towards holistic transformation and underscores the government’s dedication to modernizing India’s railway infrastructure.”

Shipping

As India accelerates its focus on manufacturing and the “Make in India” initiative, the shipping sector is under immense pressure to adapt and thrive amidst evolving global demands. The need to reduce logistics costs and enhance efficiency is paramount, driven by continuous investments in modernization from both the government and private sectors.

Mr. Rajiv Agarwal, MD & CEO of Essar Ports, says, “As India focuses on manufacturing and Make in India, reducing logistics costs and enhancing efficiency through continuous investment in modernization by both the government and the private sector is crucial. Government initiatives such as Gati Shakti, Harit Sagar, Sagarmala, and Maritime Amrit Kaal Vision 2047 are pivotal in facilitating this transformation.”

In a recent pre-budget consultation chaired by Finance Minister Nirmala Sitharaman, Ashwani Kumar, President of the Federation of Indian Export Organizations (FIEO), underscored a critical need. He highlighted the necessity for India to develop robust, globally competitive shipping lines. Kumar pointed out that establishing an Indian shipping line with a 25% market share could potentially save up to $50 billion annually. This strategic move would not only diminish the nation’s reliance on foreign carriers but also significantly benefit micro, small, and medium enterprises (MSMEs), which frequently grapple with high logistics costs.

Mr. Amit Tandon, CEO & Managing Director of Asia Shipping India, also weighed in on the sector’s expectations.

He asserts “As India gears up for the upcoming budget, the government should focus on reforms and proposals aimed at sustained capital investment in transportation, port, and digital infrastructure development to enhance logistics efficiency and competitiveness, aligning with the National Logistics Policy’s vision and goals.”

Key areas of focus include significant infrastructural investments in multimodal logistics parks and freight corridors, tax reforms, and financial incentives for adopting cutting-edge technology like AI and IoT. Continued infrastructure momentum is vital for transformation-led growth, requiring holistic development to strengthen distribution networks and global value chains. To sustain momentum in sustainability, the sector aims to adopt green practices, reduce its carbon footprint, and align with global environmental standards, contributing to the ‘Viksit Bharat @ 2047’ mission. Integrating the National Logistics Policy and the Sagarmala Project is essential for improving India’s global Logistics Performance Index ranking, ” Tandon added.

E-commerce & MSME’s

As India continues to advance its position in the global economy, the e-commerce and MSME (Micro, Small, and Medium Enterprises) sectors are facing critical challenges and opportunities. High logistics costs and the need for efficient infrastructure are at the forefront of industry concerns, and the upcoming budget is anticipated to address these pressing issues.

Mr. Sandeep Chadha, Founder, and CEO of Warehouster, highlights the significant impact of India’s high logistics costs. He notes, “India’s high logistics costs—14–18% of GDP compared to 8% for other global leaders—inflate domestic product prices. These costs also hinder Indian exports. A national logistics policy can streamline operations and reduce expenses, making Indian products more competitive internationally.” Chadha further emphasizes that a well-developed logistics network, supported by such a policy, can minimize agricultural product spoilage by ensuring faster movement from farms to consumers. This is crucial for benefiting both farmers and consumers. The booming e-commerce sector, valued at approximately US$57–60 billion in 2023 and projected to grow to US$300 billion by 2030, requires efficient warehousing and last-mile delivery infrastructure to thrive. The National Logistics Policy, alongside advancements in coordination, is seen as a vital factor in improving delivery speed, tracking, and reach, especially in remote areas.

Gregory Goba Ble, Managing Director of UPS India, shares his perspective on the upcoming Union Budget. He states, “India stands on the cusp of a logistics revolution, and the upcoming Union Budget will play a defining role in shaping its course. Building upon the foundation established in the past few budgets, which included significant investments in critical transport infrastructure projects to establish last- and first-mile connectivity, is crucial.” Ble emphasizes that the budget should continue its commitment to boosting the logistics sector, particularly for MSMEs. He advocates for timely access to finance, cutting-edge technologies, and relevant training to ensure these businesses can compete globally.

Mr. Nitin Aggarwal, CEO of TVS Infrastructure Investment Manager Private Limited, also addresses the sector’s needs. He notes that with the rise of e-commerce hubs across India, there is an increased demand for efficient warehousing solutions. “The rise of e-commerce hubs across India has amplified the demand for efficient warehousing solutions,” Aggarwal explains. “This growth necessitates advanced, strategically located warehouses to meet the heightened expectations of modern consumers.” He highlights the potential for higher rental growth in emerging corridors within Tier-2 and Tier-3 cities, which are expected to outpace established submarkets due to a lack of quality supply. Aggarwal advocates for incentives such as MSME status for the industrial real estate sector, tax relaxations, uniform land acquisition norms, and simplified warehousing compliance processes to support the sector’s growth.

Mr. Uday Sharma, Chief Commercial Officer at Allcargo Gati Limited, emphasizes the importance of logistics for the MSME sector. “As the lifeline of the MSME sector, the logistics and supply chain industry plays a crucial role in efficiently delivering their products and enabling them to reach the market or their destination,” Sharma says. He calls for the budget to focus on investments in infrastructure development, digitalization, and skill development to empower MSMEs. Sharma also underscores the role of logistics providers in enhancing operational efficiency through capacity-building workshops and digital transformation projects.

Rahul Garg, Founder and CEO of Moglix, says, “Leveraging India’s strong economic growth and fiscal responsibility, the 2024–25 Budget can become a catalyst for innovation in AI, deep tech, and manufacturing. Increased R&D funding in AI, alongside clear ethical guidelines, is crucial to establishing global leadership in this transformative field. For the manufacturing sector, streamlining regulations, tax breaks, and infrastructure investments will boost efficiency and empower startups to compete globally. Specialized incubators, accelerators, and robust export support can provide them with the resources, mentorship, and market access needed for success.”

Aviation

India’s journey towards becoming a global aviation hub is marked by notable achievements, yet the path ahead requires strategic advancements in several key areas. Industry leaders emphasize the importance of building self-sufficient aviation clusters, enhancing maintenance, repair, and overhaul (MRO) support, and fostering innovation to solidify India’s position in the global aviation landscape.

Kami Viswanathan, President of FedEx, MEISA, envisions transformative investments in the logistics sector. “We anticipate seeing significant investments throughout the industry in multi-modal connectivity, including advanced air cargo terminals and infrastructure enhancements to create seamless trade corridors, aligning with the Prime Minister’s Gati Shakti Plan and the National Logistics Policy.” He highlights the need for continued focus on trade facilitation, streamlining and digitizing clearance processes, which will minimize delays and enhance cargo movement efficiency. FedEx remains committed to advancing these initiatives to support India’s trade growth.

Underscoring the need for advancements in aviation infrastructure and MRO support, Subbu Venkatachalam, Head of Marketing at Carborundum Universal Limited said, “For India to transform into a leading aviation hub, the focus must be on building self-sufficient aviation clusters, bolstering maintenance, repair, and overhaul (MRO) support, and encouraging innovation. A region like Hosur which is a key node of the dedicated Tamil Nadu Defence Industrial Corridor can gain a definite advantage with a world-class airport under the UDAN scheme. This will give an impetus to the sector’s manufacturing and R&D efforts in the corridor and strengthen the local supply chain. This will help delink the availability of sector-critical materials from global logistical challenges. The cost of spares for aircraft engines and components clocking approximately 80% and 55% of the overall cost of MRO services.

Venkatachalam highlights that it is therefore important to incentivize domestic production of critical raw materials such as Yttria-stabilized Zirconia, which is vital for thermal spray and barrier coatings. These coatings enhance the longevity of aero engines and components, reducing costly overhauls. He advocates for the establishment of dedicated facilities for R&D, testing, and certification to accelerate research in new-age nanomaterials like graphene, crucial for both civil and military aviation.

Calling for regulatory reforms to improve the ease of doing business, Mr. Mahesh Fogla, Executive Director of Patel Integrated Logistics Limited, states the current challenges faced in GST. “To promote ease of doing business, it is essential to alleviate tax pressure and compliance, whether it is company law, income tax, or GST. Currently, GST notices are issued nationwide by just seeing them in the portal and without any application of mind. The IATA president already mentioned in the public domain that foreign carriers may quit India due to tax (GST) issues. As GST is a relatively new law, it is suggested that no penalties be imposed for the initial three years of the new business, allowing citizens sufficient time to comprehend the law,” he said.

He emphasizes the need to bring aviation turbine fuel under GST to ensure a level playing field between Indian and foreign carriers.

Expecting the government to further embrace Drones and propel the growth of Aviation sector, Bodhisattwa Sanghapriya, Founder and CEO of IG Drones said, “The Indian drone sector has witnessed rapid growth in recent years, and the upcoming Union Budget has raised expectations for policy measures and fiscal incentives to further boost this industry.”

Sanghapriya expects an extension of the Production-Linked Incentive (PLI) scheme and calls for simplified regulations for drone operations and commercial applications.

He adds, “Initiatives to promote drone-based startups and innovation hubs, providing technical and financial support to entrepreneurs, will further fuel the growth of the sector. These measures will create a robust ecosystem for drone technology, driving innovation, job creation, and economic growth. By addressing these expectations, the Union Budget 2024 can play a pivotal role in positioning India as a global leader in the drone industry,”

The forthcoming budget holds the potential to chart a transformative path for India’s economy, catering to the diverse needs and aspirations of various industries. By prioritizing sustainability, innovation, and robust infrastructure development, experts believe the 2024-25 Budget will foster inclusive growth and solidify India’s position on the global stage.