Pre-budget expectations | Transport and logistics

Despite sustained public investment in infrastructure, India’s logistics costs remain structurally higher than global benchmarks, constraining trade efficiency and supply-chain resilience. Budget 2026 therefore represents a critical opportunity to unlock productivity gains across aviation, maritime, and surface transport ecosystems through targeted fiscal, financial, and regulatory measures.

In the Maintenance, Repair, and Operations (MRO) segment spanning aviation and shipping, industry stakeholders are seeking capital-linked incentives such as investment subsidies and accelerated depreciation, calibrated through outcome-based cost benefit assessments. Incentive structures linked to measurable outcomes including employment generation, tax revenues, foreign exchange savings, and multiplier effects would ensure efficient capital deployment. Continued support for cluster-based MRO development, backed by common infrastructure and streamlined regulatory approvals, would improve asset utilisation, reduce turnaround times, and materially lower lifecycle maintenance costs. Such measures are critical to positioning India as a competitive regional MRO hub and reducing the outflow of high-value maintenance expenditure to overseas centres.

For ports and bunkering, enhanced infrastructure support for bunkering facilities is expected to strengthen port-side revenue streams while improving India’s attractiveness as a port-of-call destination. Rationalisation of duties on bunker fuels, combined with targeted incentives for greener alternatives such as methanol and LNG, would align Indian ports with evolving global fuel standards and decarbonisation imperatives, while enabling a phased transition to next-generation maritime fuels.

Logistics technology and digitalisation remain central to improving system-wide efficiency. Budgetary support for the development and adoption of an integrated deep-tech logistics stack covering visibility, tracking, automation, and data integration could significantly lower adoption barriers for mid-sized and smaller logistics players. This would accelerate gains in coordination, asset productivity, and cost transparency across fragmented supply chains.

Within the maritime industry, stakeholders are closely monitoring the operationalisation of the Maritime Development Fund (MDF). While the creation of the fund is a positive signal, there is broad recognition that the current scale of committed resources may not be sufficient given the capital-intensive nature of shipping, port infrastructure, and maritime services. Clear governance and monitoring frameworks, innovative financial instruments such as credit guarantees, predictable disbursement mechanisms, and a meaningful expansion of the fund would be critical to crowding in private capital, de-risking long- gestation projects, and accelerating capacity creation across the maritime ecosystem.

The transition toward green logistics and cleaner fuels should receive sharper policy backing in Budget 2026. Targeted subsidies or fiscal credits for low-carbon logistics assets particularly electric trucks, energy-efficient fleets, and alternative-fuel infrastructure would help reduce emissions while maintaining cost competitiveness for logistics operators. Beyond direct incentives, demand-side measures such as priority access to public-sector freight contracts, viability gap funding for early adoption, concessional financing through development finance institutions, and interest subvention for green fleet investments could significantly accelerate uptake. Clear long-term policy signals on fuel standards, vehicle scrappage, and carbon pricing frameworks would further improve investment certainty. Complementing these measures with incentives for circular manufacturing and reuse of logistics assets would help create a sustainable demand pull across the ecosystem.

Finally, container and equipment manufacturing is emerging as a strategic priority. Broader incentives under PLI and export promotion schemes, alongside the potential grant of infrastructure status, could catalyse domestic manufacturing, generate employment, and reduce India’s dependence on imports for critical logistics equipment.

Taken together, Budget 2026 is expected to reinforce a shift from fragmented, asset-specific interventions toward an integrated logistics growth strategy one that aligns infrastructure investment with digital enablement, sustainability, and private capital mobilisation, strengthens India’s position in global supply chains, and delivers durable economic and environmental dividends.