Union Budget 2025-26 – A Strategic Push for Economic Growth and Logistics Development : President ACAAI

NEW DELHI : The Union Budget 2025-26 presents a balanced roadmap that fuels economic expansion while maintaining fiscal prudence. For the logistics, air cargo, and supply chain industries, the budget outlines key initiatives that promise to enhance efficiency, reduce costs, and drive modernization, says Mr. C. K Govil, President, Air Cargo Agents Association of India ( ACAAI).

1. Infrastructure Investments: Strengthening Logistics & Supply Chains
   • Interest-Free Loans to States (₹1.5 Trillion): These funds will be crucial in developing multimodal logistics parks, better road connectivity, and port expansions, directly impacting cargo movement efficiency.
   • Maritime Development Fund: Expansion of port infrastructure and inland water transport to facilitate seamless global trade, reducing dependence on congested road and rail networks.
   • Urban Challenge Fund: Supporting smart city initiatives, which will improve urban logistics, warehousing, and last-mile delivery networks.
2. Air Cargo and Aviation Sector: Accelerating Growth
   • Incentives for the Aviation Industry: Measures to improve airport cargo handling capacity, airfreight corridors, and digitization of customs clearance will reduce lead times and enhance trade efficiency.

• Tax Relief for Logistics Players: Expected rationalization of GST and duties on logistics services, making airfreight and multimodal transport more cost-effective.
• Digital Trade Facilitation: Investments in AI and automation for paperless trade, e-documentation, and faster customs clearance will streamline cargo movement.

3. Manufacturing & MSME Growth: A Positive Impact on Freight Volumes
   • Boost to ‘Make in India’: A new National Manufacturing Mission aims to enhance domestic production, increasing cargo volumes for both exports and domestic distribution.
   • Expanded Credit for MSMEs: Improved credit access for small businesses will drive higher demand for logistics services, particularly in e-commerce, pharma, and perishables sectors.
4. Fiscal Discipline and Economic Stability: Ensuring Long-Term Growth
   • Fiscal Deficit Target of 4.5%: The government remains committed to reducing the fiscal deficit while ensuring investments in growth sectors, signaling long-term economic stability.
   • Tax Benefits for the Middle Class: Increased disposable income for consumers will boost demand across retail and e-commerce, indirectly benefiting air cargo and logistics sectors.
5. Impact on Trade and Global Connectivity
   • FTA & Export Growth Measures: Trade-friendly policies and improved Free Trade Agreements (FTAs) are expected to increase international cargo volumes.
   • AI and Digital Infrastructure: Investments in blockchain, AI-driven supply chain management, and automated warehousing will make logistics operations more efficient.

Conclusion: A Growth-Oriented Budget for the Logistics Sector

The Union Budget 2025-26 reinforces the government’s commitment to modernizing logistics, enhancing air cargo efficiency, and promoting seamless trade opportunities —whether through improved infrastructure, better financing options, or trade facilitation initiatives.

With the right industry collaboration and policy execution, this budget could be a turning point for India’s air cargo and logistics ecosystem.