Union Budget 2025: Key Logistics Growth Insights
The Union Budget 2025 has hit the right notes in the logistics sector. It’s much like a well-charted course for exporters, freight forwarders, and supply chain players toward smoother and faster trade. Finance Minister Nirmala Sitharaman presented it in Lok Sabha on February 1, 2025, unveiling a bold vision focused on infrastructure development, innovations, and logistics. It put forward a new era that empowers MSMEs, small businesses, and top logistics companies in India. The message is clear - It’s all about getting India ready to play a stronger role in global trade. Not to forget how Commerce and Industry Minister Piyush Goyal has also lauded it as a transformational budget, with a balanced and forward-looking approach.
Logistics has been the backbone of India’s economy for a long time now. Over the years, the Indian government has consistently prioritized this sector as a key factor for growth. One of the obvious reasons is its key role in achieving the $5 trillion economy dream. Even with this year’s budget, Nirmala Sitharaman continues to keep up the momentum and has positively surprised the logistics sector once again. The rightly placed focus on innovation, boosting exports, and strengthening India’s position in global supply chains brings a renewed sense of optimism for the future.
Let’s explore in this blog what’s new in the world of logistics, the anticipated impact, and our approach moving forward.
Key Announcements at Union Budget 2025-26
Experts are predicting logistics costs to drop, manufacturing sectors will rise, and India’s trade will get smoother. So, what was newly announced in this budget?
State-of-the-Art Infrastructure Development: Building a Stronger Backbone
One of the biggest highlights of this year’s budget is the allocation for infrastructure under the PM Gati Shakti National Master Plan. If you’re one of the top logistics companies in India, then this is a big deal.
Here’s what you need to know:
- 434 Projects Identified: The Ministry of Finance has identified 434 projects aimed at enhancing connectivity and logistics efficiency. These roads, railways, and ports - all will be enhanced solely for better connectivity
- Digital Integration: The budget has predominantly also emphasized integrating PM Gati Shakti’s digital infrastructure and data mapping. This will attract investments, increase private sector participation, and streamline operations across the sector.
- Special Economic Zones (SEZs) Revamp: Another focal point has been revamping SEZs to create logistics hubs that promote exports and reduce turnaround times.
What does this mean in the logistics sector? Expect smoother supply chains, reduced supply chain costs, and better resilience against disruptions.
Export Promotion Mission: Taking Indian Goods Global
Exports are a huge driver of economic growth, and the government knows this. On top of that MSMEs account for 45% of exports, things needed to be accelerated. That’s why they’ve introduced the Export Promotion Mission, which comes with sector-specific and ministerial targets.
Here’s what’s on the table:
- Sector-Specific Targets: The mission will be driven by the Ministries of Commerce, MSME, and Finance, focusing on industries like textiles, electronics, and engineering goods.
- Simplified Export Credit: Easier access to export credit and cross-border factoring support will make it simpler for logistics businesses to compete internationally.
- Tackling Non-Tariff Barriers: This mission aims to remove hurdles in international markets, particularly benefiting MSMEs.
- Financial Boost: With a budget of ₹2,250 crore, the mission aims to strengthen export capabilities and benefit top logistics companies in India.
In response to recent declines in goods exports, these measures are expected to revitalize the logistics space and drive growth.
Strengthening Domestic Manufacturing: Becoming a Global Powerhouse
To play a bigger hand in global logistics, India needs to boost its domestic manufacturing capabilities. Interestingly, the budget introduces several initiatives to make this happen:
- Infrastructure Investments: We're seeing a significant push in industrial and warehouse leasing across Tier I and Tier II cities. The spotlight is on building top-quality Grade A facilities, a development that will benefit top logistics companies in India
- Demand for Industrial Sheds: The need for industrial sheds and warehouses will boom, with projections suggesting that the major logistics market could see demand soaring to 30-40 million sq. ft. in the coming years
- National Manufacturing Mission: There's a plan in the works to boost India's manufacturing sector, covering small, medium, and large industries to strengthen the "Make in India" initiative. The goal? Increase the sector's share of the GDP to 25% by 2025, up from the current 17%.
- Support for Industry 4.0: Investments are being channeled into the domestic electronic equipment industry to harness the opportunities presented by Industry 4.0, driving smarter and more efficient manufacturing.
- Global Capability Centres (GCCs): Efforts are underway to create a national framework that encourages the growth of GCCs, especially in emerging Tier 2 cities.
BharatTradeNet: Transforming International Trade
One of the most exciting announcements in the budget is BharatTradeNet (BTN), a digital public infrastructure platform designed to streamline international logistics processes.
Here’s what makes BTN a game-changer:
- Unified Digital Platform: The integration of customs, DGFT, GSTN, banks, and exporters into a single digital platform.
- Paperless Processes: Say goodbye to tedious paperwork. BTN aims to enhance efficiency and reduce logistics-related costs.
- Global Best Practices: It is also specifically designed to align with international standards and simplify trade processes along the way.
- BTN is expected to complement the Unified Logistics Interface Platform (ULIP) and become part of the India Stack, which already includes UPI, Aadhaar, ONDC, and DigiLocker.
Maritime Development Fund: Boosting the Maritime Sector
To provide long-term financial support for the maritime industry, the government has announced the establishment of a Maritime Development Fund.
Here are some highlights you should know:
- Corpus of ₹25,000 Crore: The fund aims to foster healthy competition and encourage sustainable growth for top logistics companies in India.
- Support for Infrastructure Development: Investments in ports, shipping, and related infrastructure.
- Facilitating Private Sector Participation: Encouraging investments from private players to strengthen the logistics & maritime sector.
The crystal clear aim is to position India as a key player in global maritime trade.
Healthcare and Duty Exemptions for Lifesaving Drugs
There might also be good news on the healthcare logistics front, the government has announced significant duty exemptions for lifesaving drugs. This move is expected to make treatments more affordable.
Key measures include:
- Full Exemption from Basic Customs Duty: 36 lifesaving drugs and medicines will now be completely exempt from basic customs duty.
- Concessional Duty Rate: Six additional medicines will get a concessional customs duty rate of just 5%.
- Support for Patient Assistance Programs: Duty exemptions will also cover 37 medicines and 13 programs that provide treatments free of cost to patients.
These steps are expected to bring much-needed relief to individuals facing high costs for chronic or rare disease treatments.
Promoting Handicrafts and Employment in Traditional Sectors
To support traditional industries, the budget has also rolled out some measures to promote handicrafts and value-added logistics exports.
The initiatives are as follows:
- Exemption for Wet Blue Leather: Full exemption from Basic Customs Duty to encourage value addition and employment.
- Duty Reduction for Fisheries: Reduction in Basic Customs Duty from 30% to 5% on frozen fish paste and from 15% to 5% on fish hydrolysate for manufacturing fish and shrimp feeds.
Final Thoughts
The logistics game is changing, and so should your strategy. You need more than just quick fixes and routine solutions. Kenshine is one of the top logistics companies in India, offering end-to-end logistics services. We forecast demand, optimize operations, and provide seamless supply chain solutions. Our AEO-certified expertise empowers you to capitalize on new opportunities in a smarter and more efficient way. Whether it’s air, ocean, or surface freight forwarding — count on us. Let’s gear up for a future that’s smarter, faster, and globally connected!
