Logistics industry hoping for consistency in growth policy, continued infra push, tax reforms, financial incentives
NEW DELHI : When India awaiting the announcement of the Union Budget 2024 date by Finance Minister Smt. Nirmala Sitharaman, the logistics industry is expecting consistency in policy, technology and infrastructure-led reforms, from the newly formed NDA Government. Industry leaders said in order to become a $7 trillion economy by 2030 for India, the logistics industry is set to play a role as a growth catalyst. The government should, the industry voiced, focus on reforms and proposals towards a continued capex push for transportation, port and digital infrastructure development to boost logistics efficiency and competitiveness in line with the vision and goals of National Logistics Policy. Nishith Rastogi, Founder & CEO, Locus, said, “With the new National Logistics Policy and initiatives like PM Gati Shakti already setting the groundwork, the industry is on the verge of transformative growth. Continued government support is essential to foster innovation and assist startups in navigating this evolving landscape, ensuring that the sector remains competitive and resilient.”
Important areas of concentration include making large infrastructural expenditures to improve efficiency, such as building multimodal logistics parks and designated freight corridors, added Zaiba Sarang, Co-Founder, iThink Logistics.
Besides these, the industry is also looking at tax reforms, financial incentives, and incentives towards adoption of cutting-edge technology like AI and IoT.
The finance minister is likely to table the Union Budget 2024 in the third week of July, during the monsoon session of Parliament. The session will begin on July 22 and is expected to continue till August 9. According to media reports, the Budget will be presented on the first day of the session. Earlier on February 1, Nirmala Sitharaman had presented the Interim Budget for FY24 ahead of the Lok Sabha elections.
Here is what logistics companies are expecting from the Union Budget…
Ketan Kulkarni, Chief Growth Officer, Allcargo Logistics
As India is aspiring to become a $7 trillion economy by 2030, 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 emphasised on the continuity and stability in the decision-making and policy measures and we expect the reflection of that intent in the full Budget.
The logistics industry is at the cusp of technology transformation and structural transition thanks to the launch of National Logistics Policy and PM Gati Shakti National Master Plan. 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.
There should be policy continuity in developing economic railway corridor programmes to boost rail freight share and reduce carbon emission as well as enhance operational and cost efficiency. A dedicated focus on sustainability will help the sector adopt green practices, reducing its carbon footprint and aligning with global environmental standards. The logistics industry is geared up to contribute to the ‘Viksit Bharat @ 2047’ mission.
Darshan Ghodawat, CEO and Managing Director, AVA Global Logistics LLP
The upcoming interim budget presents a crucial opportunity to balance economic growth with fiscal consolidation by prioritizing capital expenditure in key infrastructure projects and providing financial incentives like PLI, tax benefits, and subsidies. Creating a cohesive ‘One India’ logistics ecosystem and integrating initiatives such as the National Logistics Policy and Sagarmala Project are vital to enhancing India’s global Logistics Performance Index ranking. Emphasizing domestic manufacturing and preparing the logistics sector for service integration, fulfilment logistics, and multi-modal transportation will reinforce India’s potential as a manufacturing powerhouse. Automation investments in technologically advanced warehouses can position India as a logistics innovation leader. Additionally, formal recognition of the gig workforce under labour laws and significant support for the EV industry are essential. Including diesel under GST is a critical move to regulate costs and improve competitiveness. Strategic resource allocation towards infrastructure, competence, and traceability will sustain progress, driving India towards a $5 trillion economy.
Nishith Rastogi, Founder & CEO, Locus
As we await the 2024 Union Budget, the focus for India’s logistics sector remains clear: a forward-looking budget that champions technological integration and robust infrastructure development. With the new National Logistics Policy and initiatives like PM Gati Shakti already setting the groundwork, the industry is on the verge of transformative growth.
This budget represents a pivotal opportunity to future-proof our logistics industry. Beyond infrastructure enhancements and tax reforms, there is an urgent need for strategic resource allocation to adapt to market dynamics, including fuel price fluctuations and supply chain disruptions. By investing in cutting-edge technology and aligning with global digitalization and sustainability standards, we can mitigate current challenges and position India as a leader in a tech-driven, efficient logistics sector on the global stage. Additionally, incentives for green logistics and digital infrastructure development will be key to achieving our long-term goals.
Zaiba Sarang, Co-founder, iThink Logistics
The logistics industry has great hopes as the Union Budget 2024 draws near. Important areas of concentration include making large infrastructural expenditures to improve efficiency, such as building multimodal logistics parks and designated freight corridors. For enhanced operations and transparency, embracing cutting-edge technology like AI and IoT needs incentives. Streamlining the GST system and encouraging sustainability by using electric cars and other eco-friendly activities is also essential. 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. By addressing these issues, the industry will contribute more to India’s economic development .
Raju Sinha, Chief Business Officer, Fship Logistics
My expectations are centered around a few key areas that could significantly impact the logistics and e-commerce sectors. I hope to see a continued focus on enhancing the ease of doing business. Streamlining regulations and reducing compliance burdens for startups and SMEs will encourage innovation and growth. Simplifying and reducing the tax structure, particularly around GST, can help businesses manage their finances more efficiently and encourage more entrepreneurs to enter the market.
Investments in infrastructure are crucial. Improved road and rail networks will enable more efficient supply chains, benefiting both businesses and consumers. Pushing forward initiatives like the National Logistics Policy, which aims to reduce logistics costs and boost the sector’s competitiveness, is essential.
Additionally, supporting MSMEs through accessible financing options and skill development programs will strengthen the backbone of our economy. MSMEs play a crucial role in the logistics supply chain, and empowering them will have a ripple effect across the industry.
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 primary aim is to reduce logistics cost from 14% of GDP to 8-10% of the GDP. Further, there should be focus on infrastructure development for faster TAT and seamless movement of goods. India with its vast coastline and internal waterways have a huge potential in the push for multimodal Logistics thereby developing and integrating the local and global supply chain. Further, it would be beneficial to reduce the GST rates on HCV and MCV for EV and Alternate fuels to encourage the industry to migrate to cleaner fuels.
Ravi Goel, Chief Business Officer, RapidShyp
The E-Commerce industry in India has changed the business landscape, increasing consumption by providing direct access to end-consumers and creating fresh job opportunities. In anticipation of the upcoming Union Budget, we look forward to measures that can strengthen ongoing efforts towards improving last-mile connectivity in the logistics sector. For D2C brands and small sellers driving the Indian economy, this is non-negotiable, as they will be key growth drivers for our economy. The government’s steadfast backing through technology adoption, digitisation, innovative digital payment methods and local logistics infrastructure development has played a major role in boosting the logistics industry. It is anticipated that the new budget will continue these initiatives while ensuring the smooth integration of local and global value chains. By doing so, these are the aspects that will keep us going, help SMEs grow and contribute to the nation’s overall economic development.