Govt mulls survey to estimate cost of logistics incurred by businesses

New Delhi: The government is likely to initiate a first of its kind survey to arrive at robust and timely estimates for the cost of logistics incurred by businesses, said people familiar with the matter.

The Department for Promotion of Industry and Internal Trade (DPIIT) plans to engage the National Council of Applied Economic Research (NCAER) to conduct a primary survey to assess cargo movement patterns and the cost of logistics for each component involved, they said.

Last year, the think tank had estimated India's logistics costs in 2021-22 at 7.8-8.9% of the GDP, based on secondary data. "We will do another exercise along with the NCAER because the previous one was based on secondary data. This time, it will combine feedback and original surveys," said an official, who did not wish to be identified.

A memorandum of understanding is being worked out between the department and the council for this, the official said. Capturing origin-destination pair-wise, commodity-wise, geography-wise data is critical for accurate estimations. The department is also working on improving India's ranking in the World Bank Logistics Performance Index from 38 in 2023 to below 25.

The government aims to come up with a methodology to address the twin objectives of timely and robust measurements of logistic costs, and ways to reduce such costs by removing bottlenecks.

The survey will help shed light on logistics cost per tonne per kilometre on each of the routes under consideration and differential in logistics costs across routes, modes, products, types of cargo and service operations.

Origin-destination route surveys of selected products to obtain information on the relevant time and cost of transportation and storage, administrative bottlenecks at customs, warehouses and freight and forwarding agents, and ports are being deliberated, according to people in the know.