Government Policies Supporting GCCs in Logistics: Transforming India’s Supply Chain Ecosystem

India’s $3.7 trillion economy relies heavily on its logistics sector which is currently experiencing a major transformation. Historically the logistics sector consumed 14–15% of the GDP which is twice the global average thereby generating inefficiencies that obstruct economic progress.

To transform its logistics sector the Indian government has developed comprehensive policy frameworks to establish India as a Global Capability Centers (GCCs) hub. Supply chain innovation and cross-border trade get essential support from these centres through automation. Reforms from both central and state governments are transforming logistics infrastructure which enables companies to enhance operational efficiency and achieve worldwide market expansion.

The NLP initiative began in 2022 as the largest project yet to update India’s logistics operations. The main goal of this initiative is to lower logistics costs to 8% of GDP by 2030 through improved operational efficiency.

The overall NLP initiative is focused on digitization of logistics, which improves real-time visibility, and better demand forecasting. With NLP, GCCs can optimize their supply chain with better analytics, reduce overall logistics costs with demand forecasting.

Key components include:

• Unified Logistics Interface Platform (ULIP): The Unified Logistics Interface Platform (ULIP) integrates 30 separate systems from seven ministries including customs and ports to deliver real-time cargo tracking through a single-window platform. The initiative minimizes administrative delays and strengthens the connection between international groups and Indian logistics associates.
• Ease of Logistics (ELOG): The grievance redressal portal has been set up to resolve logistics problems like permit delays and infrastructure bottlenecks within a stipulated period to create a more business-supportive environment. This reduced grievance management time enables businesses to move forward swiftly.
• Logistics Data Bank (LDB): LDB handles 100% of the container volume of the country. LDB has provided visibility to more than 42 million EXIM containers till date and has covered more than 60 toll plazas and 170 + CFS, ICD’s, empty yards, ICPs under their belt.

Impact: Business operational costs reduced by 8–10% while export-import clearance times improved by 20% due to reforms driven by NLP.

The Gati Shakti Master Plan for economic development is predicted to cost ₹100 lakh crore (USD $1.2 trillion) and is designed to internalize over 1,300 infrastructural projects in a GIS network for Multimodal Logistical Interconnections. This will allow for smoother planning as well as quicker operational fulfilment. Important changes are as follows:

• Expansion of port capacity: Key ports such as Mundra and Jawaharlal Nehru Port Trust (JNPT) are augmenting their capacities from 1,500 MTPA in 2020 to an estimated 3,300 Million Tonnes Per Annum (MTPA) by 2025.
• Dedicated Freight Corridors (DFC’s): The existing 3,300 km Western and Eastern DFC’s will save revenue on rail freight’s expenses by 30% and will also be able to complete the journey from Delhi to Mumbai in 8 hours as opposed to the standalone hours it takes. More than 70% of this infrastructure is already built.

With Gati Shakti, supply chain management across sectors with a unified digital platform for better planning. GCCs can leverage this data to improve site selection, understand port capacity in real-time, reduce freight expenses and improve their movement of goods.

These technological developments are important for GCCs which sustain extensive supply routes both globally and within the country.

The Sagarmala Programme is focused on improving port management with modernization and improved efficiency. Worth about ₹6.5 lakh crore ($80 billion), this programme is reinvigorating ports and coastal shipping with reduced turnaround times. GCCs can benefit with better nodal connectivity – directly impacting service levels across the global supply chain. Sagarmala also promotes Coastal Economic Zones (CEZs) that generate rich logistics and trade data – which can help GCCs with data for analytics.

Recent achievements include:

• Construction of 81 port projects, including deep-draft facilities at Vizhinjam and Vadhavan.
• Over the last decade, India has witnessed a significant 118% growth in coastal shipping and a remarkable 700% surge in inland waterway cargo movement, collectively contributing to reduced logistics costs and emissions while easing congestion on roads and railways.

The government has allowed up to 100% FDI in logistics parks, warehousing, and cold chains under the automatic route. Since 2020, this policy has attracted $5.4 billion worth of investments from global players like DP World and Amazon for automation-enabled and scalable infrastructure.

While national policies lay the foundation, state-specific incentives further drive logistics GCC expansion. Key state-level policies include:

The Maharashtra Mega Logistics Park

This 2021 Logistic Policy in Maharashtra, helps GCCs with a 25% capital subsidy for the development of Multi-Modal Logistics Parks (MMLPs) and a 50% stamp duty exemption on warehouse construction. A noteworthy example is the Pune MMLP, with an investment cost of about ₹1,200 crores, it has created nearly 8,000 jobs.

The Gujarat Integrated Logistics Policy, 2023

This integrated logistics and logistics park policy is focused on bolstering the state’s infrastructure with tax holidays for GCCs GIFT City and Dholera Special Investment Region (SIR).

The Karnataka’s Integrated Logistics Policy (2020–25)

This policy aims to digitize and enhance the state’s logistical infrastructure with the adoption of advanced technologies such as AI, IoT and blockchain. Bengaluru’s thriving tech ecosystem has attracted global logistics leaders like FedEx and DHL to establish significant operations in the city.

The Tamil Nadu Industrial Corridor Policy

The Chennai-Kanyakumari Industrial Corridor, supported by 15% land subsidies, is projected to boost regional GDP by 10%. With Chennai emerging as an EV manufacturing hub, GCCs in automotive and electronics logistics are leveraging this growth.

But there remain challenges even as there is progress:

• Regulatory Fragmentation: The fleets do not operate in isolation, yet the state tax structure and permits are not uniform, which hampers the carriage of goods from one state to another.
• Land Acquisition Delays: The are delays in land acquisition, while land records are being digitized to address this, it still is a bottleneck for warehousing development.

Considerable potential exists to allow the smooth functioning of the GCC, as the logistics market in India is expected to achieve a growth rate of 10–12% CAGR to reach $380 billion by 2025, whereas advanced technologies under the NLP that include drone deliveries and blockchain customs clearance will address the efficiency of the GCC.

Making GCCs future-proof India is putting in place enabling trade facilitatory policies that will pave the way for cost-efficient, tech-enabled, and infrastructure-scalable logistics GCCs. This means:

• Faster clearance time via ULIP ELOG.
• Reduction in freight costs through development of DFCs and improved coastal shipping.
• Subsidies at the state level for setting up technology-driven logistics hubs.

Partnering with Astravise Services empowers your logistics Global Capability Center (GCC) in India by providing:

• We bring a deep understanding of the ever-changing landscape and the supporting government policies, making sure you have a smooth entry and a sustainable growth path. Our strong partnerships and industry expertise help untangle complexities, providing clarity and strategic guidance at every step of your setup and operations.
• By tapping into our vast network, we connect you with professionals who have the specific skills your logistics GCC needs, reflecting India’s broader advantage in skilled talent.
• We help you take full advantage of India’s significant cost benefits through smart planning and operational support, ensuring you achieve optimal performance and a healthy bottom line. Our all-encompassing, end-to-end solutions cover everything from initial strategy and regulatory navigation to seamless implementation and ongoing operational support.
• By managing essential operational tasks like paperwork, personnel management, and people-related functions, we allow your leadership to focus on driving innovation and reaching your strategic goals in the logistics sector.
• We make sure your logistics GCC meets global quality and security standards, providing reliability for your international operations. Our proactive communication nurtures a strong, transparent, and collaborative partnership, keeping you in the loop every step of the way.

Explore how Astravise Services can elevate your logistics strategy