Gadkari: India's logistics cost to fall to 9% on road infra push
Synopsis
India's logistics costs — once as high as 16% of GDP — are closing in on 9%, according to Union Minister Nitin Gadkari, backed by IIT research showing road infrastructure alone has already trimmed costs to around 10%. With 36 green express highways in the pipeline and engineering exports hitting a record $122.43 billion in FY26, the data suggests India's infrastructure push is beginning to deliver measurable economic dividends.
Key Takeaways
Nitin Gadkari stated India's logistics cost is on track to fall to 9% of GDP on the back of road infrastructure development.
IIT research completed six months ago found infrastructure improvements have already reduced logistics costs to approximately 10% of GDP , down from 16% .
36 green express highways are under development and expected to further cut logistics costs.
India's auto sector now ranks third in the world , having surpassed Japan in the past 6–8 months, with an industry size of ₹22 lakh crore .
India's engineering goods exports hit an all-time high of $122.43 billion in FY26 , up 4.86% year-on-year .
Gadkari set a five-year target for India to become the global leader in alternative fuels and biofuels.
Union Minister of Road Transport and Highways Nitin Gadkari said on 30 April that India's logistics cost is on track to drop to 9 per cent of GDP, driven by the current pace of road infrastructure development. The minister made the remarks while presenting the 57th EEPC India National Awards to top engineering exporters in New Delhi.
What the Research Shows
Gadkari cited studies by IIT Bengaluru, IIT Kanpur, and IIT Chennai, completed approximately six months ago, which found that road infrastructure improvements had already reduced logistics costs by 6 per cent, bringing them down to roughly 10 per cent of GDP. The minister noted that logistics costs in India were previously as high as 16 per cent of GDP, compared to around 18 per cent in China and approximately 12 per cent in the United States and Europe.
Key Infrastructure Developments
The minister highlighted that 36 green express highways are currently under development and are expected to further transform the logistics cost landscape. Gadkari stressed that infrastructure, technological innovation, and sustainable practices are central to boosting India's exports. He also urged the industry to adopt electric trucks for moving goods from factories to ports as part of a broader push toward alternative fuels.
India's Auto Sector Milestone
Gadkari noted that the Indian automotive sector surpassed Japan approximately 6 to 8 months ago, now ranking third in the world. India's auto industry is valued at ₹22 lakh crore, behind the United States at ₹79 lakh crore and China at ₹49 lakh crore. He added that the Indian two-wheeler industry already exports nearly 50 per cent of its production, and global brands — including Mercedes — are increasingly looking to manufacture and export from India.
Notably, Gadkari recounted that the chairman of Mercedes had told him, during the launch of an electric Mercedes vehicle, that the company had decided to move toward 100 per cent electric vehicles with India as its manufacturing centre.
Engineering Exports at All-Time High
EEPC India Chairman Pankaj Chadha highlighted the resilience of Indian engineering exporters, noting that despite disruptions including the West Asia conflict and trade disruptions on key sea routes, India's total engineering goods exports reached an all-time high of $122.43 billion in FY26, up 4.86 per cent year-on-year. Engineering exports, Gadkari emphasised, contribute significantly to foreign exchange earnings while generating employment and fostering industrial growth.
Gadkari's Five-Year Ambition
The minister expressed a five-year ambition for India to become the world's top nation in alternative fuels and biofuels.
Point of View
A departure from past assertions that relied largely on anecdote. The more consequential number, however, is the $122.43 billion engineering exports figure: achieved despite West Asia disruptions and sea route volatility, it suggests Indian exporters are absorbing global shocks better than before. The Mercedes manufacturing pivot, if it materialises at scale, would mark a structural shift in India's auto export identity — from volume two-wheelers to premium EVs. The real test for Gadkari's logistics vision will be whether the 36 green highways translate into last-mile connectivity gains, not just inter-city throughput.
NationPress
1 May 2026
Frequently Asked Questions
What is India's current logistics cost as a percentage of GDP?
According to IIT research cited by Union Minister Nitin Gadkari, India's logistics cost has already come down to approximately 10% of GDP from a high of 16%, and is projected to fall further to 9% as road infrastructure development continues.
Which IITs conducted the logistics cost research mentioned by Gadkari?
The research was conducted by IIT Bengaluru, IIT Kanpur, and IIT Chennai, and was completed approximately six months before Gadkari's remarks at the 57th EEPC India National Awards on 30 April.
What is the significance of India's engineering exports in FY26?
India's engineering goods exports reached an all-time high of $122.43 billion in FY26, a 4.86% year-on-year increase, despite disruptions from the West Asia conflict and sea route trade challenges, according to EEPC India Chairman Pankaj Chadha.
How does India's auto sector rank globally?
India's auto sector now ranks third in the world, having surpassed Japan approximately 6 to 8 months ago. The industry is valued at ₹22 lakh crore, behind the United States at ₹79 lakh crore and China at ₹49 lakh crore.
What is Gadkari's plan for alternative fuels and biofuels?
Gadkari expressed a five-year ambition for India to become the world's number one nation in alternative fuels and biofuels, urging the industry to adopt electric trucks and invest in innovation and research in this space.
