GST Fuels India's Logistics Efficiency Revolution

The Goods and Services Tax (GST) has substantially reduced India's logistics costs and improved efficiency. By eliminating border delays and increasing the average travel distance of trucks, GST has enhanced ease of doing business. This has been validated by improved rankings in the World Bank's Logistics Performance Index and various other metrics.

The Goods and Services Tax (GST) has been instrumental in reducing logistics costs and enhancing efficiency across India, as highlighted by the Economic Survey released on Monday.

The 'One Nation, One Tax' system has notably cut down waiting times at state borders, reducing travel time by up to 30 percent.

The Economic Survey 2023-24, presented in Parliament, noted that this has increased the average distance trucks travel from 225 km before GST to 300-325 km. This has significantly improved the ease of doing business and boosted manufacturing growth in the country.

A December study by the National Council of Applied Economic Research (NCAER) indicated a decrease in logistics costs by 0.8 to 0.9 percentage points of GDP between FY14 and FY22.

India's ranking in the World Bank's Logistics Performance Index (LPI) improved from 44th place in 2018 to 38th in 2023 among 139 countries, thanks to reduced logistics costs and better trade facilitation.

Advancements such as cargo tracking have drastically reduced dwell time at ports, evidenced by a reduction at the Visakhapatnam port from 32.4 days in 2015 to 5.3 days in 2019. India's position in international shipments advanced to 22nd in 2023 from 44th in 2018, attributed to modernization and digitalization efforts.

Additionally, India improved its infrastructure score by five places and climbed four places to 48th in logistics competence and equality.

India aims to be among the top 25 countries on the LPI by 2030.