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Indian logistics firms can gain from demand on diverted routes: KPMG

13 May '25

2 min read

Indian logistics firms can gain from demand on diverted routes: KPMG

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High demand on diverted trade routes arising out of US reciprocal tariffs can give Indian logistics firms better control over prices and margins, KPMG said.
These can build stronger regional and cross-border networks as global companies shift manufacturing to avoid tariffs.
By strengthening compliance systems and digitisation, India can position itself as a transparent trade partner, it noted.

While rising shipping and transportation costs due to US reciprocal tariffs are forcing companies to absorb higher freight bills or pass them on to consumers, resulting in an intense cost pressure building up, high demand on diverted trade routes can give Indian logistics providers better control over prices and margins, according to KPMG.

To avoid tariffs, global companies are shifting manufacturing to new regions. This trend is reshaping freight routes and forcing local logistics networks to adapt fast. India’s relatively better tariff position is making it a viable alternative. This can be an opportunity for India’s logistics players to build stronger regional and cross-border networks, the global accounting firm observed in a note.

Freight forwarders and third-party logistics (3PL) players are under pressure to help businesses navigate evolving custom rules, reroute shipments and cut through red tape. Indian players in this field can step up as strategic partners, offering key solutions, such as compliance, cost optimisation and flexible routing alternatives, it suggested.

Tariff evasion tactics like false classification of goods or illegal routing are becoming more common. Logistics providers need stronger checks to safeguard operations and reputation. While risky tactics are in play, India needs to be careful considering the shuffling trade flows, it observed.

By strengthening compliance systems and enhancing digitisation of trade processes, India can position itself as a transparent trade partner, it added.

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