Indian Logistics Sector Eyes Policy Stability and Infrastructure Push in 2026

Indian Finance Minister Nirmala Sitharaman is set to present the budget on February 1. All eyes are on the upcoming announcements regarding sectoral allocations for the new fiscal year, income tax policy adjustments, and initiatives aimed at diversifying foreign exports.

This address takes place against a backdrop of returning economic optimism, following a significant endorsement from the International Monetary Fund (IMF), which has upgraded India's growth forecast for the 2025-26 fiscal year. The government is also scheduled to present the Economic Survey on January 31, reporting on the past year's performance and setting the direction for future fiscal priorities. Fueling pre-budget sentiment, the IMF has revised India's GDP growth forecast for FY 2025-26 up to 7.3%, a jump from the previous estimate of 6.6%.

This revision, driven by strong Q3 results and domestic demand, places India well ahead of major global economies, including China (4.5%) and the United States (2.4%).

Sector Focus: Supply Chain Resilience & Green Logistics

As the countdown begins, industry leaders are urging the government to prioritize long-term structural reforms over short-term incentives. This year's focus leans heavily towards enhancing supply chain resilience, reducing strategic dependence on limited geographies, and integrating MSMEs (Micro, Small and Medium Enterprises) into the global value chain.

Ms. Smitha Shetty, Regional Director APAC at Achilles Information, observed: “We are already seeing strong momentum across industries to rethink how supply chains are designed and managed.”

She noted that budget measures supporting transparency and data-driven networks are crucial: “Over time, this will help businesses manage risk more effectively while advancing sustainability and resilience across the wider economy.”

Logistics stakeholders are calling for execution-focused reforms to lower costs while delivering tangible carbon reduction results. Mr. Nikhil Agarwal, President of CJ Darcl Logistics, emphasized the need to support the human element of the industry, specifically the driver ecosystem: “Investments in driver training, upskilling, safety, and high-quality rest infrastructure... will improve reliability and address the growing shortage of skilled drivers.”

He also advocated for outcome-based incentives to drive the green transition: “Encouraging adoption of alternate fuels and electric mobility... will enable fleet operators to transition sustainably without compromising economics.”

The Infrastructure Push

Indian Railways manages the transport of over 1,600 million tonnes of freight annually; however, its current share in the logistics market stands at only 28%. This is below the national target of 35-40%, which is necessary to achieve cost-effective logistics.

Mr. Vivek Lohia, Managing Director of Jupiter Wagons, stated: “Based on recent trends, the rail outlay is expected to see a calibrated increase of around five percent, taking the overall allocation to approximately ₹2.65 lakh crore, including extra-budgetary resources.”

Mr. Ketan Kulkarni, MD & CEO of Allcargo Logistics, views Budget 2026 as a key opportunity to reinforce the government's commitment to multimodal connectivity: “Accelerating investments across rail, road, coastal shipping, and inland waterways can reduce logistics costs and urban congestion while enabling MSMEs to access faster, more efficient, and cost-effective supply chains.”

He also highlighted the critical role of technology: “The adoption of digital and AI-driven solutions can meaningfully improve operational efficiency, resource optimisation, and service predictability, critical enablers for MSMEs looking to scale sustainably.”

Meanwhile, Mr. Nilachal Mishra, Partner and Head of Government & Public Services at KPMG India, described infrastructure as a stable domestic anchor amidst a volatile global market: “It strengthens export competitiveness by lowering logistics and energy costs, supports long-term objectives such as manufacturing scale-up and the energy transition, and sends a clear signal of policy continuity to markets.”

Mr. Mishra added: “For investors and businesses planning long-term capital commitments, that signal matters.”

The industry is seeking specific budgetary measures to reduce supply chain costs to offset these external pressures. Mr. Gayomard Driver, Group CFO of Jeena and Company, commented: “Faster clearances, lower inland logistics costs, and predictable incentive frameworks allow logistics partners to offer competitive freight solutions, enabling exporters to absorb tariff pressures and remain viable in global markets.”

Cost Reduction via Integration and Execution

Reducing logistics costs remains a central expectation from Budget 2026. Stakeholders like DHL Express expect continued investment in multimodal infrastructure under the National Logistics Policy to be vital.

Logistics operators suggest that the next phase of growth depends on smoother physical and digital integration between transport modes. Mr. Dipanjan Banerjee, Chief Commercial Officer at Blue Dart, stated that the budget should focus on reducing dwell times, simplifying customs procedures, and supporting smoother multimodal transshipment.

Digital Logistics, Cold Chain, and Tax Reforms

Tech-logistics companies are urging the government to accelerate digital adoption. Mr. Dhruv Taneja, Founder of MatchLog, suggested the budget should prioritize incentives for AI-driven logistics platforms and electric trucking corridors. On the trade-tech side, Mr. Haresh Calcuttawala, CEO of Trezix, called for structural reforms in customs and compliance to ease the burden on exporters.

In the Cold Chain sector, operators are calling for stronger recognition. Mr. Sameer Varma from ColdStar Logistics argued that Budget 2026 should treat the cold chain as “infrastructure for essentials” to improve reliability and reduce waste. Mr. Swarup Bose, CEO of Celcius Logistics, agreed on the need to accelerate investment in integrated cold chain infrastructure.

Regarding taxation, freight forwarders and shipping lines are seeking urgent relief from working capital challenges related to GST. Mr. Supal Shah, CEO of Sarjak Container Lines, emphasized the need to reduce logistics costs through rationalizing fuel taxes and providing incentives for coastal shipping.

Finally, in the express and aviation sector, Mr. Kami Viswanathan from FedEx and Mr. Aneel Gambhir from DTDC Express both highlighted the importance of rapid, predictable cross-border movement and the need for policy support measures to cope with costs and compliance complexity.

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Source: Phaata.com (According to Indian Transport & Logistics News)

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