India Logistics: 5 Major Challenges and Practical Solutions, Essential Reading for Companies Entering the Market

The current state of India's logistics market and the challenges facing Japanese companies

India's cold chain logistics market is about $23.28 billion (about JPY 3.5 trillion) in 2025 and is expected to grow to $33.12 billion by 2031 (CAGR 5.91%, Mordor Intelligence). However, behind this rapidly growing market lie serious infrastructure challenges.

Especially for Japanese companies considering entry into the food sector India Market, understanding and addressing logistics challenges is a fundamental part of business planni

Reference:

• Mordor Intelligence – Cold Chain Logistics India Market
• IMARC Group – India Cold Chain Market Size 2034

Challenge 1: An overwhelming shortage of cold chain infrastructure

長く「生鮮食品の30〜40%が失われる」と語られてきましたが、食品加工業省が委託したNABCONSの実測調査（2022年）では果実5.8〜15.9%、野菜4.9〜11.6%と大幅に下方修正されています。それでも先進国より高い水準にあり、主因はコールドチェーン（低温流通）インフラの不足です。冷蔵保管施設に保管される農産物は全体のわずか12%に留まり、追加で3,000万トン分の冷蔵容量が必要とされています。

Even more serious is the regional disparity. In India, refrigeration capacity is 70 to 75% concentrated in five states: Uttar Pradesh, Punjab, Gujarat, Maharashtra, and West Bengal, leaving central and northeastern regions significantly underserved.

Solutions

• Delhi-Mumbai-Bengaluru Gradual expansion starting from cities with well-developed cold chain infrastructure, such as
• Partnering with third-party logistics (3PL) companies
• Using shelf-stable product formats (retort pouches, freeze-dried)

Challenge 2: The difficulty of last-mile delivery

Urban areas in India suffer from chronic traffic congestion, and Tier 2 cities many areas below have incomplete addressing systems. Elements essential for a "farm to fork" connection, such as pack houses, ripening facilities, and refrigerated transport vehicles, are severely lacking.

Solutions

• Quick commerce (Blinkit and Zepto, Swiggy leveraging the last-mile networks of Instamart
• Using dark stores (delivery-only hubs) to shorten delivery times
• Introducing location technologies such as Google Maps and what3words

Challenge 3: Unstable power infrastructure

In rural India, the power grid is unstable, and operating costs can rise by as much as 35% due to the use of diesel generators In some cases, fuel costs account for about 45% of operating costs, a much larger burden compared with developed countries (about 10%).

Solutions

• Using refrigeration facilities equipped with solar power
• Introducing IoT sensors for temperature monitoring
• Using industrial parks and special economic zones (SEZs) with stable power supply

Challenge 4: Complex regulations and interstate logistics

Because India is a federal system, cross-state logistics still involves complex procedures even after unification under GST (Goods and Services Tax). Complex procedures still remain even after this unification. FSSAI Compliance with FSSAI certification is also needed, along with adapting to each state's own food regulations.

Solutions

• Partnering with 3PL companies with a track record of nationwide operations
• Local partners Leveraging a partner's regulatory compliance know-how
• Gradual regional expansion (starting by focusing on one or two states)

Challenge 5: Quality control and the risk of temperature deviation

Temperature excursions during logistics directly lead to food quality degradation and safety risks. In India's hot, humid climate in particular, maintaining the quality of Japanese food is a major challenge.

Solutions

• Mandating temperature recording devices (data loggers)
• Using blockchain technology to make the supply chain visible
• Supporting local adoption of Japanese quality control standards (such as HACCP)

Government infrastructure investment and future outlook

The Indian government is investing aggressively in strengthening logistics infrastructure. In July 2025, it approved a budget of 6,520 crore (1 crore = 10 million rupees) (about JPY 117 billion) for PMKSY (Pradhan Mantri Kisan Sampada Yojana), aiming to build 50 multi-commodity food irradiation facilities and expand the cold chain to reduce post-harvest losses.

In addition, under the National Logistics Policy, a target has been set to reduce logistics costs from the current 14% of GDP to 8%.

Reference:

• Invest India – Cold Chain Infrastructure and Future Potential
• Grant Thornton – Transforming India’s Logistics Ecosystem

Frequently asked questions

Why is the rate of fresh food waste so high in India?

In India, a significant portion of fresh food is wasted during the logistics process, and the main cause is a shortage of cold chain (low-temperature distribution) infrastructure. The proportion of agricultural produce stored in refrigerated facilities is low, and refrigeration capacity is also unevenly distributed across a few states, with regional disparities amplifying the losses.

How should the regional imbalance in cold chain infrastructure be addressed?

India's refrigeration capacity is concentrated in a few states. A practical approach is to first expand gradually from cities with well-developed cold chain infrastructure, such as Delhi, Mumbai, and Bengaluru. Partnering with 3PL companies and using shelf-stable retort or freeze-dried products are also effective.

How does unstable power infrastructure affect logistics costs?

In rural areas, power supply is unstable, and using self-generated power can raise operating costs. Solar-equipped refrigeration facilities and the use of industrial parks or SEZs with stable power supply are countermeasures.

What regulatory challenges remain for cross-state logistics?

Because India is a federal system, complex procedures remain for cross-state logistics even after GST unification. Compliance with FSSAI certification and each state's own food regulations is also required. Partnering with 3PL companies with a nationwide track record, or local partners with regulatory know-how, and expanding gradually by focusing first on one or two states, can ease the burden.

How can the quality of Japanese food be protected in a hot, humid environment?

Since temperature deviations during logistics directly lead to quality degradation and safety risks, a mechanism for recording temperature is fundamental. Making the supply chain visible and locally adopting Japanese quality control standards such as HACCP are also effective. Combining these can manage the risk of temperature deviation.

How should a food company entering India going forward structure its logistics measures?

The basic policy is to expand gradually starting from major cities with well-developed cold chain infrastructure, combined with partnerships with 3PL companies and the use of shelf-stable products. In parallel, introducing temperature monitoring and quality control standards locally minimizes logistics risk. Since the government is also investing aggressively in expanding the cold chain, it is worth choosing a base location based on the latest infrastructure developments.

Conclusion: 5 practical approaches to overcoming India's logistics challenges

India's logistics challenges are serious, but signs of improvement are emerging thanks to aggressive government investment and technological advances. Japanese companies can minimize logistics risk by combining gradual expansion from major cities with well-developed cold chain infrastructure, partnerships with 3PL companies, the use of shelf-stable products, and localization the introduction of localized quality control standards.

startups Technology partnerships with companies are also an effective option. an education service that bridges cultural gaps With a clear understanding of the risks involved, Local partners Work together to conquer the Indian market.