Can we continue our growth trajectory despite US tariff games?
The Indian logistics sector is on a strong growth path.
According to Grandview Research, the industry was valued at US$3,931.8 billion in 2024 and is projected to reach $5,951.0 billion by 2030. (~7.7% CAGR). Another study confirms that the global freight and logistics market reached USD 6,376.99 billion in 2025 and is expected to grow to USD 8,136.88 billion by 2030 (CAGR of 4.99%). These numbers reflect solid momentum driven by e-commerce, MSMEs and infrastructure upgrades.
However, recent global developments have triggered fresh concerns.
In August 2025 , the Donald Trump-led U.S. administration-imposed tariffs of up to 50% on many Indian exports, citing national security and trade concerns. As a result, import costs are rising, and supply chains are being re-evaluated across markets. This tariff pressure could disrupt trade flows, increase shipping costs, and impact logistics planning for export-oriented businesses.
However, the regular tariff threats by President Donald Trump and his constant imposition of tariffs, frequent retraction or flip-flops on positions concerning global issues has left countries world over on the edge. Many have either obliged, revolted or even imposed counter measures.
India’s position has mostly been about waiting and watching as the situation unfolds while strengthening internal demands and increasing trade partnerships with other countries.
However, such external pressures do test India's logistics growth and raise questions about the sector's resilience.
This also begs a question - Will these tariff moves derail the strong growth momentum of India’s logistics sector, or is India well-positioned to absorb the shock and continue on a strong trajectory?
In this blog, we break down the impact and the road ahead. Read on to find out more.
Logistics sector’s growth: fueled by e-commerce, MSMEs, and a national push for digital transformation
E-commerce & Quick Commerce
India’s online retail boom is a major tailwind for logistics. The rapid growth of “quick commerce” (delivery in under 30 minutes) demonstrates rapidly changing consumer demand. Industry Report confirms that in 2024, more than two-thirds of all e-grocery orders in India came via quick-commerce platforms. This surge in demand is driving faster deliveries, boosting the logistics sector’s growth.
MSMEs & Manufacturing Link
Small and medium enterprises (MSMEs) are major users of logistics services. However, the logistics cost burden is especially heavy for smaller firms. Stat show that small companies in India with a turnover of up to ₹5 crore, spent approximately 16.9% of their output on logistics. Therefore, efficient logistics is essential for MSMEs to manage this expense effectively.
Digital Transformation & Infrastructure Reform
Major infrastructure and digital reforms further enhance India's logistics potential. According to a report, India aims to reduce its logistics costs to below 10% of GDP by December 2025, a significant improvement from previous estimates of 13–14%.
Furthermore, government programs such as PM Gati Shakti National Master Plan, the National Logistics Policy, and the digital platform Unified Logistics Interface Platform (ULIP) are improving multi-modal linkages and enabling better coordination. These initiatives collectively reform the logistics sector and create a stronger foundation for future success.
Can we continue on our growth trajectory despite U.S. tariff games?
The short answer is yes. Here are some factors that support this claim.
Lower Reliance on Any Single Trade Partner
The global trade environment is shifting rapidly, with the U.S. taking a more aggressive stance through tariffs and trade threats. As a result, many countries, including India, are reassessing trade alliances, sourcing strategies, and supply-chain dependencies. While the U.S. remains a key export market, India is diversifying its export destinations to reduce single-point dependence and lower vulnerability to U.S. policy changes.
India’s domestic strength and diversified base cushion the impact
India has a strong domestic and international ecosystem. The IMF recently raised India’s 2025–26 growth forecast to 6.6%, showing confidence despite U.S. tariff pressures. Furthermore, improving infrastructure, new transport corridors, and a rising MSME ecosystem are creating a multiplier effect on jobs and accelerating logistics demand.
Long-Term Structural Reforms Outweigh Short-Term Tariff Noise
Tariffs are cyclical and political, but India’s logistics transformation is structural. Digital platforms, multimodal connectivity, and policy reforms are steadily improving efficiency and reducing costs. Over a 5–10 year horizon, these reforms matter more than short-term trade friction.
A few caveats are worth noting
- While the logistics sector is experiencing growth, there are still significant challenges to overcome, including land costs, a skewed (heavy reliance on road transport), regulatory complexity, and last-mile delivery in hinterland regions.
- The U.S./global trade risk is not zero. Industry insight indicates that a U.S.-led trade war would hurt the global economy, lower output, and prevent countries from fully benefiting from global specialization.
- Lastly, competition from other emerging logistics markets (Southeast Asia, Africa) may increase. Therefore, India needs to stay efficient, competitive, and cost-effective to sustain its appeal.
Conclusion
While the current U.S. tariff escalation creates uncertainty and places pressure on export-dependent sectors, India’s logistics sector looks robust due to the e-commerce growth, a rising MSME base, and infrastructure reforms.
Institutional investors have started investing back in India and the current ratings by monetary bodies provide confidence to the investors and businesses looking to setup in India. Overall, with fiscal prudence and continued reforms in trade and investment sectors, India can manage the impact of US tariffs better.