Budget 2026: Logistics sector seeks policy stability and infrastructure push

Finance Minister Nirmala Sitharaman will present the Union Budget 2026 at 11:00 am on Sunday, February 1, with equity markets remaining open for trading. The Budget comes amid improved macroeconomic sentiment, following the International Monetary Fund’s (IMF) upward revision of India’s GDP growth forecast for FY 2025–26 to 7.3%.

The government will table the Economic Survey on January 31, outlining economic performance over the past year and setting the tone for fiscal priorities ahead. Against this backdrop, logistics and supply chain stakeholders are calling for policy stability, sustained infrastructure investment and targeted reforms to reduce costs, support exports and accelerate the sector’s green transition.

Supply chain resilience and structural reforms
Industry leaders are urging the government to prioritise long-term structural reforms over short-term incentives, with a focus on strengthening supply chain resilience and reducing strategic dependence on limited geographies.

Smitha Shetty, Regional Director APAC at Achilles Information, said that there is strong momentum across industries to rethink how supply chains are designed and managed. She said Budget measures that support transparency and data-driven networks are critical, as they help businesses manage risk more effectively while strengthening resilience across the wider economy.

Shetty added that such measures also play an important role in advancing sustainability outcomes over time.

Infrastructure push and multimodal connectivity
Infrastructure investment remains a central expectation from Budget 2026, particularly to improve freight efficiency and lower logistics costs. While Indian Railways transports over 1,600 million tonnes of freight annually, its modal share stands at around 28%, below the national target of 35–40%.

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

He noted that with electrification nearing completion, capital deployment is likely to shift towards easing congestion through new lines, gauge conversion, track doubling and the expansion of dedicated freight corridors and economic corridors linking ports to mineral clusters.

Ketan Kulkarni, MD and CEO of Allcargo Logistics, said, “Budget 2026 is a crucial opportunity to reinforce the government’s commitment to multimodal connectivity. He said accelerated investments across rail, road, coastal shipping and inland waterways could reduce logistics costs and urban congestion while enabling MSMEs to access faster, more efficient and cost-effective supply chains.”

Nilachal Mishra, Partner and Head of Government & Public Services at KPMG in India, described infrastructure spending as a stable domestic anchor in a volatile global environment. He said it strengthens export competitiveness by lowering logistics and energy costs, supports manufacturing scale-up and the energy transition, and sends a clear signal of policy continuity to markets and long-term investors.

Industry players are also seeking measures to directly reduce supply chain costs. These include lower port dwell times, rationalised transport charges and continued export incentives such as the Remission of Duties and Taxes on Exported Products (RoDTEP).

Gayomard Driver, Group CFO of Jeena and Company, said “Faster clearances, lower inland logistics costs and predictable incentive frameworks would allow logistics partners to offer competitive freight solutions, enabling exporters to absorb tariff pressures and remain viable in global markets.”

Lowering logistics costs through integration and execution
Reducing logistics costs remains a key expectation from the sector. R. S. Subramanian, Senior Vice President, South Asia at DHL Express, said “Continued investment in multimodal infrastructure under the National Logistics Policy is critical not only for the domestic economy but also for India’s export ambitions.”

Dipanjan Banerjee, Chief Commercial Officer at Blue Dart, said that Budget 2026 should focus on reducing dwell times, simplifying customs procedures and enabling smoother intermodal transfers across air, road and rail networks. He added these measures would materially reduce operating friction and help bring logistics costs closer to global benchmarks, which is essential for supporting exports.

Banerjee also noted that policy support is needed to simplify cross-border e-commerce for MSMEs, particularly from tier 2 and tier 3 markets, and to continue backing specialised logistics for high-growth sectors such as electronics, new energy and life sciences.

Green logistics, EVs and sustainable fuels
Alongside cost efficiency, logistics stakeholders are calling for targeted support to accelerate the sector’s green transition.

Nikhil Agarwal, President of CJ Darcl Logistics, said, “Outcome-based incentives are needed to encourage the adoption of alternate fuels and electric mobility.” He said such measures would enable fleet operators to transition sustainably without compromising economic viability.

Subramanian of DHL Express said that sustainability is becoming a core priority for global trade, with express logistics players increasingly focused on reducing emissions through the adoption of sustainable aviation fuel.

Dhruv Taneja, Founder and Global CEO of MatchLog, said Budget 2026 should prioritise incentives for EV trucking corridors and green logistics under PM Gati Shakti. He added that a sustained policy push on EV adoption and green logistics would help make India’s logistics ecosystem faster, more efficient and environmentally responsible.

Human capital and operational reliability
The logistics sector is also seeking greater focus on workforce development to improve reliability and service quality.

Agarwal of CJ Darcl Logistics said investments in driver training, upskilling, safety and high-quality rest infrastructure are essential to address the growing shortage of skilled drivers and improve operational reliability across the sector.

Digital-first logistics and smarter freight movement
Technology adoption is emerging as a key enabler of efficiency and scale. Kulkarni of Allcargo Logistics said the adoption of digital and AI-driven solutions can significantly improve operational efficiency, resource optimisation and service predictability, particularly for MSMEs looking to scale sustainably.

Taneja of MatchLog said investments in shared inland infrastructure near industrial clusters and AI-led visibility frameworks could reduce empty miles, ease port congestion and improve equipment productivity.

Trade technology firms are also calling for structural reforms in customs and compliance. Haresh Calcuttawala, CEO and Co-founder of Trezix, said “Exporters continue to face tariff distortions, compliance overheads and delayed capital cycles that weaken global competitiveness. He said Budget 2026 should focus on faster duty drawback mechanisms, PLI-linked export enablement and initiatives such as Product Passport-based automation to speed up customs clearance”.

Calcuttawala also said stronger incentives for MSME digitalisation, ULIP–ICEGATE interoperability and regulator-led innovation would help reduce disputes, working-capital lock-ups and documentation delays.

Cold chain as essential infrastructure
Cold-chain operators are urging the government to recognise temperature-controlled logistics as essential national infrastructure.

Sameer Varma, Executive Director at ColdStar Logistics, said Budget 2026 should treat cold chains as “infrastructure for essentials” to improve reliability, reduce wastage and strengthen healthcare preparedness. He said expanding and simplifying funding windows under existing government schemes, supported by blended finance and credit enhancement, could attract private investment.

Varma also called for incentives for energy-efficient refrigeration and thermal storage upgrades, along with harmonised temperature and traceability standards for pharmaceutical distribution. He said targeted GST relief on cold-chain assets such as refrigerated vehicles and freezing equipment would accelerate capacity creation.

Swarup Bose, Founder and CEO of Celcius Logistics, said Budget 2026 should accelerate investment in integrated logistics and cold-chain infrastructure to reduce wastage and improve turnaround times in agri and pharma supply chains. He said targeted fiscal incentives, easier access to capital and deeper public–private collaboration would strengthen India’s competitiveness as a supply-chain hub.

GST reform and working capital relief
GST-related working capital challenges remain a major concern for freight forwarders and shipping companies.

Supal Shah, CEO of Sarjak Container Lines, said the inverted duty structure under GST continues to block cash flows for logistics service providers, effectively acting as an unintended tax on operations. He called for a unified GST rate with full input tax credit eligibility and a refund mechanism for accumulated credits.

Shah also said fuel tax rationalisation, incentives for rail and coastal shipping, and targeted subsidies for green logistics, including electric and LNG-powered trucks, would help lower logistics costs.

Anish Kumar Jha, Managing Director for India, Sri Lanka and the Maldives, Kuehne Nagel said the sector is looking for consistency in policy and execution. He said stability in Production Linked Incentive (PLI) schemes, sustained infrastructure development and a streamlined regulatory environment would allow logistics players to invest with confidence in capacity, technology and network expansion.

Air cargo, express logistics and time-critical trade
Air and express logistics players are urging faster and more predictable cross-border movement to support time-sensitive trade.

Kami Viswanthan, President for the Middle East, Indian Subcontinent and Africa at FedEx, said India’s competitiveness will increasingly depend on how seamlessly cargo moves across borders and modes. He said Budget 2026 should support the development of dedicated air cargo infrastructure and accelerate digital, time-bound customs and clearance processes.

Domestic express operators are also flagging rising costs and compliance complexity. Aneel Gambhir, Chief Financial Officer at DTDC Express, said fuel volatility, higher insurance and maintenance costs continue to impact margins, while layered documentation requirements slow down interstate and cross-border shipments.

Gambhir said Budget 2026 should focus on faster rollout of multimodal logistics parks, improved port connectivity, cold-chain support, GST rationalisation and incentives for AI- and IoT-driven visibility, automation and green logistics.