India’s Transportation Sector: Scaling Efficiency Amid Structural Transformation

India’s transportation sector is a critical enabler of economic growth, contributing over 4% to India’s gross value added and employing over 22mn people.

Despite its scale, the sector has historically been fragmented with logistics costs at 13%-14% of GDP, higher than the 8%-10% in developed economies.

The government has implemented initiatives like the National Logistics Policy, National Infrastructure Pipeline, and PM Gati Shakti to promote multimodal integration, digital infrastructure planning, and logistics cost optimisation.

The sector is entering a multi-year investment cycle supported by manufacturing expansion, rising e-commerce intensity, infrastructure modernisation, and policy continuity. However, execution risks, fuel price volatility, currency movements, and project gestation delays remain key sensitivities.