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India is poised to enter a new era of economic growth, and the Union Budget 2025 introduces several strategic initiatives aimed at transforming the logistics sector while promoting sustainable development. With a strong emphasis on the ‘Make in India’ initiative and duty exemptions to boost exports, the budget creates a favourable environment for logistics companies to thrive.
Let’s explore the key aspects of the Union Budget 2025 that directly and significantly impact the Indian logistics sector.
IMPACT ON DIFFERENT MODES OF LOGISTICS
Maritime Development Fund
The government has announced the creation of a ₹250 billion ($3 billion) Maritime Development Fund to strengthen India’s shipbuilding and repair industry. The government will contribute 49% of the fund, with the remainder sourced from ports and private sector investments. This initiative aims to expand the national fleet, reduce dependence on foreign carriers, and promote the development of shipbuilding clusters.
Railway Modernisation
The government plans to prioritise railway modernisation, with the railway budget expected to rise to ₹2.9-3 trillion for 2025-26. Key initiatives include:
- Expansion of Indian Railways’ 68,000 km network.
- Freight corridor development to enhance logistics efficiency.
These efforts will improve the efficiency and reliability of rail freight, offering logistics companies faster and more cost-effective transportation options.
Continued Focus on PM Gati Shakti and the Introduction of Bharat Trade Net
The budget reinforces the government’s commitment to key infrastructure initiatives:
- PM Gati Shakti: A digital platform integrating 16 ministries, including Railways and Roadways, to facilitate coordinated planning and implementation of infrastructure projects.
- Bharat Trade Net: A unified digital platform for trade documentation, designed to streamline export procedures.
Both initiatives will enhance supply chain efficiency, reduce transit delays, and improve logistics management across sectors.
THE CROSS-SECTOR INFLUENCE OF LOGISTICS OPERATIONS
- Duty Exemption on Life-Saving Drugs
To enhance healthcare accessibility, the government has removed import duties on a range of life-saving drugs and vaccines. This measure will positively impact medical logistics by reducing transportation costs and ensuring the faster availability of essential medicines, thereby improving healthcare delivery across the country. - Micro, Small, and Medium Enterprises (MSME)
Recognizing the importance of MSMEs in global trade, the government is launching an Export Promotion Mission with an outlay of Rs 2,250 crore. This initiative will provide financial incentives, technological support, and marketing assistance to help MSMEs expand their export capabilities. Growth in MSME exports will drive demand for logistics services, especially in international shipping and freight handling. - Reduction in Basic Customs Duty (BCD)
The government has announced a reduction in Basic Customs Duty (BCD) on various imported goods to facilitate ease of doing business and lower manufacturing costs. Lower customs duties will reduce costs for importers, leading to higher import volumes. - Duty Exemptions for EV Batteries and Mobile Phone Components
The budget has exempted duties on:- 25 essential components for electric vehicle (EV) battery production.
- 28 components used in mobile phone manufacturing.
These exemptions will accelerate domestic EV battery production and mobile phone manufacturing, making India a manufacturing hub while creating increased adoption of electric trucks and renewable energy-powered warehouses.
The Union Budget 2025 presents a forward-looking strategy to enhance India’s logistics sector through substantial investments in infrastructure, digital transformation, and trade facilitation. With supportive policies in place, the Indian logistics industry is set to achieve unprecedented growth in the coming years, reinforcing its role as a key driver of economic development.
