India Logistics Sector Gains Scale with AI and Rail Push

India's logistics sector scripted a landmark year in 2025, emerging as a resilient growth engine amid global supply chain flux. Logistics costs dipped below 10% of GDP for the first time, fueled by PM Gati Shakti's execution of 434 projects worth ₹11.17 lakh crore and the National Logistics Policy's three-year maturation, which boosted multimodal freight share and slashed transit times by 15-20% on key corridors. E-commerce volumes surged to $380 billion, with AI adoption tripling among SMEs for predictive routing and 19% faster resolutions, while Dedicated Freight Corridors hit 96% operational status, and 35 multimodal parks gained approval.

Infrastructure Momentum Defines 2025

Budget 2025-26's ₹1.5 trillion state loans catalysed multimodal parks, port upgrades, and highway expansions, complemented by the ₹25,000 crore Maritime Development Fund for long-term financing. These unlocked last-mile efficiencies, with 91 Gati Shakti Cargo Terminals commissioned and rail projects spanning 6,290 km, eased urban congestion and port delays that plagued prior years. Industry players navigated challenges like rural gaps and empty miles through geospatial integration across 57 ministries, positioning India as a nearshoring alternative amid geopolitical shifts.

Tech and Sustainability Take Centre Stage

AI/IoT drove operational transparency, with platforms optimising carrier allocation and cutting failed deliveries by 31%, while EV incentives and Carbon Credit Trading schemes advanced green warehousing. MSME exporters benefited from SEZ revamps and PPP pipelines, amplifying air cargo and D2C scalability in a sector now powering 14% of GDP contributions. 

"2025 marked India's logistics coming of age, from cost burdens to competitive edge. PM Gati Shakti and NLP delivered tangible wins, but 2026 demands bolder AI integration and green mandates to unlock sub-8% costs and global dominance," says Zaiba Sarang, Co-founder, iThink Logistics.

2026 Outlook: Bold Bets for Global Competitiveness

Looking to 2026, sustained capex on rail corridors, digital grids, and green mandates will target sub-8% costs, aligning with Viksit Bharat's export ambitions. Expect accelerated AI sandboxes, GST rationalisation, and SME-focused frameworks to propel 15-20% efficiency gains, making India a sustainable supply chain hub. The sector's trajectory, from cost-cutter to innovation leader, promises not just domestic dominance but a pivotal role in global trade, provided policy and private tech converge seamlessly.