Urban congestion to remote delivery: Tackling India’s logistics puzzle

With emerging technologies like drones, AI-driven tools, and collaborations across the logistics spectrum, India is not only addressing its unique logistical challenges but setting the stage for a globally competitive, future-ready supply chain ecosystem.

India has a population of 1.4 billion people living across 773 districts. The country has 65+ cities with more than one million inhabitants and the urban population is at 36 percent of the population. This makes India a very complex country with a diverse demography. “This scale is not even there in China,” said Aryaman Tandon, Managing Partner, Mobility, Energy and Transportation of Praxis Global Alliance, a management consulting firm. “Because in China the population is consolidated in key cities

 “India has a very distributed ecosystem. Thus, logistics and the last mile become very critical. The density of population in Indian cities, the absence of road infrastructure, the unplanned, not very structured civic infrastructure and one of the largest retail networks in the world, makes it even more difficult,” he added. He also pointed out that every brand in India could succeed only on the basis of distribution and it makes India a different economy compared to larger economies like the US or China. “Only less than ten percent of India’s retail is organised despite a lot of e-commerce, quick commerce and modern trade. That makes the last mile and intracity movements extremely important in India’s distribution network,” he said.

Tandon identifies quick commerce as the latest disruptor in the market right now creating two-wheelers, three-wheelers, warehousing and last-mile logistics demands. As a result, he is predicting rapid electrification, technology adoption and cold chain penetration in the last mile in the next five years. “We will see the emergence of a lot of digitally enabled, localised, last-mile electric fleet operators, some strong in particular categories” he added.

 Tandon noted that route optimisation tools can be helpful in high-density Indian cities like Mumbai while establishing smaller centres within city limits, companies can store products closer to customers, reducing both the distance and time required for last-mile deliveries. “Advanced route optimization tools consider real-time data on traffic congestion, weather, and events, allowing drivers to adapt their routes dynamically,” he said. Also Read - Indian perishables exports - a sweet success story He also pointed out that innovations are changing the landscape in remote or challenging terrains. “Companies like Blue Dart are testing drone delivery for lightweight packages. India Post’s use of local agents in rural areas is another approach that helps provide last-mile access even in the most remote regions.” Drones in challenging last mile terrains Indeed several innovations are happening in the last mile. In fact, technology is playing a transformative role not only in cities but also in overcoming logistical barriers in rural and remote terrains. For instance, in Nov 2024, Odisha-based deep tech start-up BonV Aero launched Air Orca, which the company calls “India’s first fully autonomous logistics drone.”