Quantifying Macro Logistics Cost of India

Globalisation has opened up economic opportunities for developing countries in the form of outflow of value-added services, low-cost raw materials , human resource skills, improved market access for their exports, efficiency gains in their economies through technology transfer and spill-over, and resource re-allocations. Consequently, various developing countries, including India, have increasingly begun to position themselves for greater participation in regional and global markets. It goes without saying that India needs to build its capacity for establishing linkages with global and regional markets for deriving the optimal benefits of engaging with the globalised world. This, in turn, depends on the creation of an efficient logistics system. For this purpose, most of the developed and emerging countries estimate logistics costs on a regular basis, and use performance indicators to measure the efficiency levels of logistics activities. Till now, no attempt has been made to estimate logistics cost of India by the official statistical organisation. Two estimate of logistics cost computed by private bodies are usually quoted when one refers to Indian estimate. However, the methodology of the two needs serious introspection. In this context, this paper makes an attempt to estimate logistics cost of India.