Logistics Is the Hidden Engine of SME Competitiveness
Prof. Chandrasekharan on why India’s export dream hinges on collaboration, skills and technology adoption
Prof. Chandrasekharan is a seasoned professional with over 25 years across IT, venture capital, logistics and academia; he has also served as an independent director and mentor in the shipping and logistics sector.
In this edition of SME Dialogue, he shares his views on the structural challenges facing Indian logistics, the role of SMEs in exports, and the opportunities ahead in technology and collaboration.
You bring over 25 years of experience across IT, venture capital, logistics and academia. How has this diverse background shaped your perspective on India’s logistics industry and its role in enabling SME competitiveness?
India’s logistics industry plays a critical role in driving economic growth. If the country is to achieve its $5 trillion economy vision, manufacturing and the “Make in India” agenda must contribute significantly, alongside employment generation in the formal sector. While manufacturing creates direct jobs, indirect employment thrives in small-scale and support businesses. Their success depends heavily on advanced logistics and supply chain practices. For SMEs, competitiveness lies in balancing cost and responsiveness, often through shared approaches and cooperative models that create capabilities beyond what individual firms can manage.
As an independent director and mentor to several companies in the shipping and logistics sector, what are the top three structural challenges you see Indian logistics firms grappling with today?
The foremost challenge is the speed and extent of digitalisation reshaping global trade. Alongside this, the sector faces the need for well-planned infrastructure across distribution, warehousing, transportation, and order management. Talent remains another gap, particularly in new-age technology skills, while inadequate capital and limited access to low-cost funds constrain growth.
From a governance and strategic lens, what do SME-driven logistics companies often overlook when trying to scale or internationalise?
Many firms neglect to bring professionals into senior leadership. They also struggle to balance financial leverage, often misjudging the role of equity funding. Just as crucial is the need to build a positive culture and shared vision, fostering adaptability to digitalisation and changing trade conditions. Knowledge is now the key asset, yet traditional firms often undervalue capability building.
Looking 10–15 years ahead, what excites you about the trajectory of India’s logistics sector, particularly with the government’s emphasis on the National Logistics Policy and multimodal infrastructure?
The last decade has witnessed phenomenal growth in logistics infrastructure, improving reach and turnaround times. Government efforts to align with trade facilitation agreements have boosted India’s ranking in ease of doing trade, while direct port delivery has accelerated operations. Skill development initiatives at Level 2 and 3 are yielding results, though the future lies in higher-order skills (Levels 4 and 5) through R&D and technology applications. Digitalisation in customs and government services has been a welcome move. A sharper focus on reducing logistics costs to single-digit levels of GDP would provide a long-term competitive edge.
Where can Indian exporters carve out a distinctive edge through logistics competitiveness in global trade corridors?
SMEs already contribute substantially to exports, often leveraging cost advantages in production and processing. To sustain this edge, India must focus on improving efficiency continuously, as competing economies are also strengthening their positions. Creating distinctive, unique positioning in trade corridors will be critical.
What do you see as the biggest supply chain management constraints for Indian exporters today—whether in cost, efficiency, or reliability?
Cost competitiveness remains the weak link. High logistics costs force SMEs to reduce overall margins, limiting their ability to generate growth capital. A stronger competitive edge could emerge through collaborative initiatives and platform-based solutions that improve both cost and responsiveness. However, gaps in professional talent and limited technology investment remain pressing challenges.
How can SME exporters better align with logistics partners to overcome bottlenecks and strengthen resilience against global disruptions?
Long-term partnerships, rather than transactional arrangements, hold the key. Transparency and sustained margins help build enduring relationships between SMEs and logistics firms. Focusing on asset utilisation and cost management within these alliances can boost resilience and competitiveness.
The rapid rise of digital freight solutions, data-driven route optimisation and blockchain-enabled supply chains is transforming logistics worldwide. How ready is the Indian ecosystem to adopt these technologies at scale?
India has made substantial progress in digital infrastructure, with solutions for freight and optimisation now available. Adoption, however, hinges on engaging professionals, collaborative investments, and viewing transition costs as strategic investments. Blockchain and supply-chain finance, once more evolved, could accelerate digitalisation further.
What role do you see for academia, research and industry collaboration in helping SMEs adapt to such advanced logistics solutions?
The scope for academia-industry partnerships is immense, yet underdeveloped in India. Firms often lack the culture or funding to engage academicians in decision-making. Some focus areas could include:
- Setting up solution labs with experts and interns for SME clusters
- Developing case studies and solution capabilities through experiential learning
- Building multi-disciplinary research centres in logistics hubs
- Investing in higher-order skills through engineering and management innovation labs
Such initiatives would require policy support, as SMEs cannot shoulder the costs alone.
You recently shared a panel with heads of leading industry bodies at our Cargo Corridors conference. How critical are such associations in bridging policy, trade and technology gaps for SMEs?
Industry associations remain crucial in liaising with policymakers and members. Despite the explosion of digital media and open-source content, there is a growing need for distilled knowledge and structured engagement. Associations are better positioned to provide clarity, pick focus areas, and sustain constructive relationships among policymakers, members and the SME community.
If you had to leave one message with SME exporters and logistics providers who want to stay competitive in a fast-changing world, what would it be?
Focus on professional skills, cultivate a culture of collaboration and embrace technology as the foundation for long-term competitiveness. Disclaimer: Views expressed in the article are the personal opinions of the author.
