The Centre for Digital Economy Policy Research (C-DEP), in partnership with IIT Delhi, released a report titled “Study of Technology-Enabled Intra-City Logistics for MSMEs” at the India Habitat Centre in New Delhi. The report examines how app-based goods transportation services are helping Micro, Small and Medium Enterprises (MSMEs) improve delivery reliability, reduce logistics expenses and strengthen day-to-day business operations.
The report was formally released by Praveen Khandelwal, Member of Parliament and Secretary General of the Confederation of All India Traders (CAIT), along with Ashwini Mahajan, Co-Convener of Swadeshi Jagran Manch. MSMEs contribute nearly 30% to India’s GDP and about 45% of industrial output, but continue to face practical difficulties in moving goods within cities.
These challenges include rising transport costs, inconsistent access to suitable vehicles and frequent delivery delays. Based on interviews with MSMEs and technology-enabled goods transport service providers, along with analysis of aggregated platform data, the report concludes that these services have become an important operational support for small businesses, particularly in meeting time-sensitive delivery requirements.
Speaking at the event, Shri Khandelwal underlined the importance of lowering logistics costs for MSMEs, stating that reducing logistics expenses is closely linked to India’s long-term development goals. He pointed out that a major share of logistics costs in India is linked to road transport and stressed that improving efficiency in intra-city movement will be essential if India aims to bring overall logistics costs down to 4–5% of GDP.
Shri Mahajan highlighted the growing role of MSMEs and Indian technology in strengthening the country’s economic and strategic capabilities. He said that technology-backed enterprises have demonstrated their ability to deliver advanced innovation and noted that India’s digital ecosystem has reached a stage where other nations increasingly seek collaboration.
Dr Jaijit Bhattacharya, President of C-DEP, observed that intra-city goods movement forms a sizeable portion of road transport costs and that technology-based logistics services are delivering measurable savings for MSMEs. He added that beyond cost reduction, these platforms improve delivery predictability and time efficiency, contributing to higher earnings potential and productivity gains. He also cautioned that if taxation makes these services unaffordable, MSMEs may lose a key tool that improves both efficiency and customer confidence.
The report finds that business users form around 71% of platform users while contributing nearly 97% of intra-city goods transportation orders across two-, three- and four-wheeler categories. Among MSMEs surveyed, 73% reported reduced delivery costs, 95% said goods reached on time more consistently and nearly 27% reported wider customer reach due to on-demand logistics access.
The study also flags policy risks that could weaken these gains. It notes that GST 2.0 may incorrectly classify digitally booked goods transport as “Local Delivery Services,” raising tax from 5% to 18% and potentially increasing trip costs by more than 12%. The report warns this could push small firms back to informal and cash-based transport arrangements, impacting formalisation and service dependability.
Professor P Vigneswara Ilavarasan of IIT Delhi stated that technology-enabled logistics is helping MSMEs expand markets, improve efficiency and achieve savings, and that regulation should support these benefits. The report recommends clearer GST guidance, structured steps to bring informal operators into the formal ecosystem through digital public infrastructure and focused PLI-linked support to encourage adoption of electric freight vehicles without increasing MSME logistics costs.
