With the make in India initiative by the Indian Government, India is emerging to become leading global manufacturing hub for manufacture of automobiles, high technology electronics goods, textiles, pharmaceuticals, and Agri commodities. Logistics services is the backbone for the manufacturers by providing efficient, cost effective flow of goods. Logistics and supply chain management plays major role on economic competitiveness and growth. The performance of logistics sector in the economic development of India has never been more compelling. This was due to the high logistics cost in India. Logistics cost in India is significantly high compared to the first world regions like US and Europe. It affects the cost competitiveness of India’s exports. In India the logistics cost is around 13 – 14% of GDP as against the US (8%). Transportation and warehousing cost constitute and major portion ie, around 60% of the logistics cost. Major modes of transport in India are Sea, Road, Rail and Air. Domestic transportation has lot of challenges in India which leads to increase in logistics cost. As there are many ways to reduce the transportation cost, there is an unexplored, most significant way called Coastal Transport which can lead to many benefits in terms of cost and environment. Even though there are reasonable reduction in the cost while moving goods by Coastal Transport, still major portion of the domestic volume is moving through Road and Rail transport. This paper is to understand the requirement of domestic transport in India, explore whether usage of Coastal Transport can be an option to solve the current challenges in domestic transport in India and to understand the infrastructure requirement and other measures to strengthen Coastal Transport in India.

Keywords : Logistics Cost, Transportation, Coastal Transpor