As anticipation builds around Budget 2025, industry leaders and policymakers are keenly watching for strategic measures that will shape the future of India’s logistics and air cargo sector. With air freight playing a pivotal role in driving trade efficiency and economic growth, the upcoming budget presents a critical opportunity to enhance infrastructure, streamline regulations, and bolster India’s global competitiveness. The logistics sector is looking for decisive policy measures and increased capital outlay to modernise infrastructure, streamline freight movement, and enhance global trade competitiveness. Industry leaders, including DP World, emphasise that strategic investments in multimodal connectivity, digitalisation, and sustainability will be crucial in positioning India as a leading global logistics hub.

Rizwan Soomar, Chief Executive Officer and Managing Director, DP World Middle East, North Africa, and India Subcontinent, underscored the direct correlation between logistics infrastructure investment and trade growth by stating that, “Investments in logistics infrastructure have a direct impact on the growth of trade. Further, an increase in capital expenditure focused on a multimodal transport ecosystem, modernising physical, digital, and social infrastructure will help enhance India’s connectivity to emerging and mature markets.”

Multimodal transport

The efficiency of India’s logistics sector hinges on the development of a robust multimodal transport network that seamlessly integrates rail, road, air, and sea freight. The upcoming budget presents a critical opportunity for the government to accelerate the operationalisation of dedicated rail freight corridors (DFCs), which are expected to significantly enhance cargo movement to and from ports and industrial centres.

Soomar highlighted the importance of rail infrastructure in logistics modernisation and emphasised that, “Railways are the backbone of India’s logistics ecosystem. We look forward to dedicated rail freight corridors becoming fully operational to scale movement to and from ports and to connect production and consumption centres more effectively.”

Additionally, targeted investments in port infrastructure and inland cargo terminals will play a crucial role in improving cargo handling capacity and efficiency. By reducing bottlenecks at ports, India can streamline export-import (EXIM) trade, making its supply chains more competitive globally.

Digitalisation and automation

As global logistics undergoes rapid digital transformation, India must prioritise automation and digitalisation of freight operations to improve efficiency and reduce costs. Budget 2025 is expected to reinforce the government’s commitment to paperless trade, real-time cargo tracking, and data-driven supply chain optimisation.

Soomar noted that further advancements in freight digitalisation could significantly impact logistics efficiency. “Further digitalisation and automation of freight operations could be prioritised to improve efficiency and reduce the cost of logistics,” stated Soomar.

These initiatives will not only enhance transparency in supply chains but also foster seamless coordination between logistics service providers, manufacturers, and government agencies. By integrating Artificial Intelligence (AI), blockchain, and Internet of Things (IoT) into freight management, India can reduce inefficiencies and improve turnaround times at ports, warehouses, and rail terminals.

Sustainability in logistics

The global push for green logistics solutions has made sustainability a key focus area for policymakers and industry leaders. India’s logistics and infrastructure sectors are poised for a transition towards renewable energy solutions, with Budget 2025 expected to introduce policy measures that incentivise cleaner transportation and energy-efficient freight operations.

Soomar emphasised the role of sustainable investments in enhancing India’s trade credentials. “Sustainability is a vital, underlying aspect of the infrastructure and logistics sectors. Promoting the use of renewable-energy shore power systems at India’s ports and the adoption of electric vehicles at ports and logistics facilities through suitable tax incentives will enhance the country’s green credentials in trade.”

A potential budgetary intervention could include tax incentives for electric vehicle (EV) adoption in logistics hubs, the expansion of shore-to-ship power solutions, and investments in low-emission freight corridors. Such measures would align with India’s long-term commitments to decarbonisation under global climate agreements.

Export incentives

For India to strengthen its position in global trade, the budget must also focus on reducing export costs and enhancing the competitiveness of domestically manufactured goods. Strategic export incentives, coupled with improved trade facilitation mechanisms, could provide significant advantages for Indian businesses operating in international markets.

“The Budget could also consider introducing new export incentives and strengthening the implementation of existing schemes, which will reduce export costs and enhance the global competitiveness of India’s goods,” said Soomar suggesting strengthening export incentives should be a priority.

Enhanced Production-Linked Incentive (PLI) schemes, simplified customs procedures, and lower logistics costs will collectively contribute to India’s attractiveness as a global manufacturing and export hub.

Industry leaders are calling for Budget 2025 to prioritise strategic investments in logistics infrastructure, digital transformation, and sustainability to enhance trade competitiveness. A key recommendation is the expansion of capital investment in multimodal logistics, with a focus on modernising rail freight corridors, upgrading ports, and developing inland cargo terminals to improve efficiency and connectivity. Accelerating the digital transformation of freight operations is also essential, with AI-driven logistics planning, real-time tracking systems, and blockchain-based trade documentation seen as critical tools for streamlining supply chain processes.

 Additionally, policymakers are urged to incentivise green logistics solutions, including the adoption of renewable shore power at ports, electrification of freight transport, and increased use of cleaner fuels to reduce the sector’s environmental impact. Strengthening export incentives and reducing regulatory compliance burdens would further bolster India’s global trade position, ensuring that the country remains competitive in the evolving international marketplace.

Transformative for trade

As India seeks to become a US$5 trillion economy, an efficient and sustainable logistics sector will be a critical enabler of economic growth. Budget 2025 represents a unique opportunity to drive multimodal connectivity, integrate digital innovation, and promote green logistics solutions.

With a strategic focus on rail freight corridors, port modernisation, digitalisation, and sustainability, the government can ensure that India’s logistics sector evolves into a globally competitive, cost-effective, and environmentally sustainable ecosystem.

The industry now looks to the budget for clear policy commitments and financial allocations that will set the foundation for India’s logistics transformation in the years ahead.

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