India's high logistics costs are mainly due to the structural overreliance on road transport, which carries 60-65% of freight. This is more expensive per tonne-kilometer than rail and waterways, and is worsened by fragmented networks and operational inefficiencies.

CURRENT STATE

This modal imbalance leads to hauling costs of ₹2.5–₹3.0 per tonne-kilometer by road, versus ₹1.5–₹1.8 by rail and ₹1.0–₹1.2 by waterways, keeping logistics costs at 7.97% of GDP. Fragmented systems cause delays, with trucks losing six to eight hours per trip and ports experiencing dwell times of three to four days.

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