Tech-Enabled Logistics Cut Intra-City Costs for MSMEs

19 Jan 2026 CW Team

A recent study by the Centre for Digital Economy Policy Research (C-DEP), conducted in collaboration with IIT Delhi, highlights the role of technology-enabled goods transportation services in reducing intra-city logistics costs and improving efficiency for MSMEs. The report was released in New Delhi and examines how digital platforms are becoming integral to daily MSME operations.

MSMEs, which contribute nearly 30 per cent of India’s GDP and 45 per cent of industrial output, continue to face challenges such as high transport costs, unreliable vehicle availability and delivery delays. Based on interviews and aggregated service-provider data, the study finds that tech-enabled logistics has emerged as a key enabler, improving reliability and turnaround time.

Speaking at the release, Praveen Khandelwal emphasised that lowering logistics costs is central to India’s development ambitions, particularly in road-based and intra-city transport. Ashwini Mahajan highlighted how technology adoption has strengthened MSMEs’ capabilities across sectors, reinforcing India’s growing digital ecosystem.

Key findings show that business users account for around 71 per cent of users on tech-enabled transport platforms and nearly 97 per cent of total orders. Among surveyed MSMEs, 73 per cent reported lower transport costs, 95 per cent saw improved on-time deliveries, and about 27 per cent expanded their customer reach.

The report also flags policy risks, warning that potential GST reclassification could raise logistics costs significantly, undermining efficiency gains. It recommends regulatory clarity, gradual formalisation of informal transport operators and targeted policy support to ensure affordable, sustainable logistics for MSMEs.

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