CARGOCONNECT-AUGUST 2025 - Flipbook - Page 12
C A T A P U L T
Logistics Rewired:
PM GatiShakti
Reshaping National
Competitiveness
I
ndia’s logistics ecosystem is undergoing a transformative
shift — one that is 昀椀nally translating policy intent into
real-world performance. According to the National Council
of Applied Economic Research (NCAER), the country’s
logistics costs have dropped significantly to between
7.8–8.9% of GDP, down from the long-quoted range of 13–14%.
This sharp correction re昀氀ects more than just statistical re昀椀nement;
it signals a structural recalibration of India’s logistics backbone.
At the heart of this transformation is PM GatiShakti, the
government’s most ambitious and coordinated infrastructure
development initiative to date. Designed as a national master plan,
it aims to break departmental silos, synchronise infrastructure
planning, and catalyse economic growth through multimodal
connectivity.
From Cost Burden to Competitive Edge
Despite the marked improvement, India’s logistics
costs still exceed the global benchmark of 6–8%
of GDP seen in advanced economies. But the gap
is narrowing, and perhaps more importantly,
momentum is building. India’s jump from 44th to
38th in the World Bank’s Logistics Performance
Index (LPI) 2023 is a clear signal of positive direction.
The opportunity ahead is immense: With
sustained implementation, India can evolve from a
traditionally ine昀케cient logistics environment to a
globally competitive supply chain hub, supporting
its vision of becoming a US$5 trillion economy.
The Seven Engines of Connectivity
At the core of PM GatiShakti lies the ‘Seven Engines’
framework: Roads, railways, airports, ports, waterways, mass transit, and logistics infrastructure. These pillars
are not just about movement, they are about multipliers. For
every rupee invested, infrastructure generates 2.5 to 4 times the
economic output, with roads and railways leading the charge.
The plan’s ambitions are bold:
l Expand national highways to 200,000 km
l Boost railway freight capacity to 1,600 million tonnes
l Commission 200–220 new airports
l Achieve seamless multimodal integration
But ambition alone isn’t enough. Challenges persist — from
land acquisition delays and regulatory hurdles to coordination gaps
between state and central bodies. The institutional architecture
is in place; now, execution must scale with urgency and precision.
Enter the Game-Changer: GatiShakti Cargo Terminals (GCTs)
One of the most visible outcomes of GatiShakti is the rollout of
dedicated cargo terminals along India’s Dedicated Freight Corridors (DFCs). The government plans to build 200 GCTs under the
public-private partnership (PPP) model over the next few years.
With just 77 GCTs currently operational across the country and
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each terminal averaging `70 crore in investment, the
growth potential is enormous.
DFCCIL, the nodal agency behind the corridors,
already has four terminals operational and plans to
commission six more by FY26. These hubs will transform
how freight is handled in India, bringing speed, scale,
and sustainability to the system.
Railways: From Load Bearer to Growth Enabler
Rail continues to be the workhorse of Indian logistics,
contributing 67% to the railways’ total traffic (vs.
33% from passengers). With the commissioning of the
DFCs — especially the Western DFC, which is set to be
fully operational by December 2025 — freight volumes
are expected to soar.
These corridors, costing over `1.24
lakh crore, are capital-intensive but
promise long-term returns by:
l Boosting operational e昀케ciency
l Reducing freight costs
l Cross-subsidising passenger fares
l Lowering carbon emissions
What’s more, the goal is not to compete with road logistics, but to integrate
and complement it.
Building a Resilient and
Sustainable Logistics Ecosystem
PM GatiShakti is more than an infrastructure mission, it is a nation-building exercise. The long-term vision incorporates:
l Real-time project monitoring
l Innovative infrastructure 昀椀nancing models
l Private sector participation
l Capacity-building for implementing agencies
With the right focus on technology adoption and
stakeholder coordination, India is poised to unlock
the full socio-economic bene昀椀ts of infrastructure: job
creation, regional equity, environmental gains, and
improved quality of life.
Conclusion: The Logistics Revolution Has Just Begun
India’s logistics transformation, once marred by
inefficiencies and fragmentation, is now on a clear
trajectory toward global standards. PM GatiShakti is
the catalyst — enabling integration, unlocking capital
productivity, and creating a logistics ecosystem ready
for the 21st century.
If momentum is maintained, and execution meets
ambition, India won’t just reduce its logistics costs, it
will rede昀椀ne what’s possible for emerging economies
around the world.
