India is entering 2025 with its infrastructure development thrust front and center as the eagerly awaited Union Budget 2025-26 approaches. Aiming for economic growth and resilience, the government is focusing on enhancing logistics and infrastructure through various strategic plans and investments. With the goal of becoming a USD 5 trillion economy, industry experts are voicing their expectations for the budget, emphasizing the need for substantial capital expenditure and transformative policies across multiple sectors.
The upcoming budget has garnered immense attention from logistics industry stakeholders, who are calling for sustained investments particularly within transport connectivity, port development, and the promotion of multimodal logistics solutions. “We expect continued thrust on capital expenditure for physical and digital infrastructure and emphasis on port infrastructure development for attaining 10,000 MTPA port capacity by 2047. Continued investment to improve transport connectivity, rail corridors, incentives for the adoption of electric vehicle (EV) trucks, and fiscal benefits for developing EV infrastructure will aid sustainable multimodal connectivity,” stated Suresh Kumar R, Managing Director of Allcargo Terminals Limited.
The emphasis on Dedicated Freight Corridors (DFCs) is also seen as pivotal. Balfour Manuel, Managing Director of Blue Dart, highlighted the importance of investments aimed at increasing freight train speeds, developing Dedicated Freight Corridors, and bolstering multimodal infrastructure for industries such as mining and cement. This infrastructure is poised to redefine logistical capabilities, thereby improving overall economic efficiency.
The pressure isn’t solely on national projects, as port modernization is equally significant. The shipping industry has long sought infrastructure status to facilitate access to affordable financing for modernizing ports. “The Union Budget 2025-26 can play a pivotal role by granting infrastructure status to the shipping industry, enabling access to affordable, long-term financing for port modernization,” noted Girish Aggarwal, Managing Director of APM Terminals Pipavav. Such initiatives are seen as key to reducing operational costs and enhancing the competitiveness of India’s ports.
With India turning toward carbon neutrality, industry leaders are advocating for fiscal incentives promoting electric vehicle adoption and the expansion of EV charging infrastructure. “A key expectation is the incentivization of EV charging infrastructure, which is pivotal to driving sustainability through greater adoption of electric vehicles within logistics operations,” revealed Ketan Kulkarni, Managing Director of Gati Express and Supply Chain Limited. He expressed hope for subsidies aimed at alternative fuels and renewable energy warehouses as part of this green transition.
Industry stakeholders are also stressing the necessity for strategic frameworks aiding the development of smart logistics parks and enhancing supply chains. Subhasish Chakraborty, Founder, Chairman, and Managing Director of DTDC Express Ltd., remarked on the need for increased investments to modernize logistics infrastructure. This includes creating smart logistics parks and ensuring smoother multimodal transport networks to not only deliver sustainable solutions but also lower logistics costs and emissions.
Significantly, the Budget 2025 discussions highlight Micro, Small, and Medium Enterprises (MSMEs), with plans anticipated to improve their operational capabilities. “For the upcoming Union Budget, we hope for enhanced measures aimed at MSMEs, driving youth skilling and fostering investment-ready industrial parks,” stated Balajee Bobba, Director of Bobba Group. The potential support for MSMEs is seen as integral to connecting small businesses with larger logistics operations.
Digital transformation remains another focus area, with increased calls for the Unified Logistics Interface Platform (ULIP) to streamline processes. Anish Kumar Jha, Managing Director of Kuehne+Nagel India, Sri Lanka, and the Maldives, emphasized the necessity for promoting digital integration. He added, “The upcoming budget presents an opportunity to both simplify processes and provide comprehensive training, which can revolutionize real-time tracking and end-to-end visibility.” This integration is expected to bolster logistics efficiency, supporting the sector’s larger growth ambitions.
Looking back at recent trends, India’s Economic Survey of 2024-25 has highlighted the necessity for sustained infrastructure investment over the coming decades to maintain high growth rates. It indicates capital spending faced challenges in Q1 FY24-25, showing only Rs 66,000 crore was spent per month compared to Rs 60,000 crore during the same period last year. This emphasizes the gap still present, particularly as the government calls for greater private sector involvement across various infrastructure sizes.
The survey anticipates enhanced participation from private entities, particularly within regions where public investment could not meet infrastructure demands. Private financing models like Public Private Partnerships (PPP) are expected to be explored more extensively to broaden funding avenues and innovative solutions to infrastructure bottlenecks.
Challenges point to recent constraints on new approvals hampering progress and delayed spending due to monsoonal weather conditions. Nevertheless, the data is promising with notable improvements observed during certain periods of FY25, hinting at future progress.
There remains much to achieve as the clock ticks closer to the presentation of the Union Budget by Finance Minister Nirmala Sitharaman. The vocal expectations from industry leaders signify hope for well-rounded policy measures balancing capital investment with sustainability, digitalization, and the unique needs of various sectors. With expectations ranging from improved multimodal connectivity to green logistics management and whole-scale technological reforms, the 2025-26 budget is seen as possible leverage to reestablish India’s global logistics competitiveness.
How the government addresses these expectations will not only signal the roadmap for Indian logistics but also capture the ability of the nation to emerge resiliently as it transitions toward its aspirations for economic growth and infrastructural advancement.