Tech-Enabled Services Reduce Logistics Costs for MSMEs: C-DEP-IIT Delhi Study
The Centre for Digital Economy Policy Research (C-DEP) in collaboration with IIT Delhi has released a report on titled “Study of Technology-Enabled Intra-City Logistics for MSMEs”. This report examines how technology-driven goods transportation can lower costs and improve efficiency for Micro, Small, and Medium Enterprises (MSMEs) in India. The study report was presented by BJP MP from Delhi Praveen Khandelwal and Ashwini Mahajan, a Co-Convener of Swadeshi Jagran Manch at an event at India Habitat Centre, New Delhi on January, 24.
MSMEs account for about 30 pre cent of India’s GDP and 45 per cent of industrial output, but they face challenges like high transportation costs and unreliable vehicle access. The study, which includes interviews with MSMEs and transportation providers, highlights that tech-enabled services are essential for daily operations of small businesses, the study report states. Khandelwal noted the importance of reducing logistics costs for India’s development, linking substantial expenses to road transport.
Mahajan emphasized MSMEs’ role in the economy, pointing out their technological advancements and India’s strengthened position globally due to a flourishing tech ecosystem. Dr Jaijit Bhattacharya from C-DEP added that most logistics costs arise from intra-city transport, stating that tech services can cut these costs while improving reliability, thus enhancing MSMEs’ productivity and earnings.
However, he cautioned that high taxes might impede access to these services, affecting efficiency and customer trust. The report found that 71 per cent of users of tech transport services are businesses, and many MSMEs reported reduced costs and better on-time delivery due to these services.
However, potential policy issues, like changes to the GST tax structure, could raise costs for MSMEs. The report urges for regulatory support instead of hindrance and recommends Government initiatives for electric vehicle adoption in freight transportation. It also highlights the need for clearer GST regulations and support for informal transport operations.
