A Review of factors impeding the adoption of AI and Blockchain in the Indian Logistics Ecosystem, thus Bridging the Digital Divide

Abstract

Logistics is the backbone of businesses across the world. Efficiency in logistics leads to measurable efficiency and has a major impact on the economy of a country. The Indian logistics sector has been in focus in recent times and policy-driven upgrades are underway. Artificial Intelligence (AI) and Blockchain Technology (BT) are the main driving forces in this upgradation.  Despite a strong economic foundation, and a projected Compound Annual Growth Rate (CAGR) of 10.7% until 2026 (Government of India, 2025), the logistics industry faces a paradox: high technological potential is severely undermined by low, uneven adoption rates (Nicolas de Bellefonds  et al., 2024). This study uses a systematic literature review and the integrated Technology-Organization-Environment (TOE) and Task-Technology Fit (TTF) frameworks (Wong, S et al., 2024) to understand the critical barriers slowing down the deployment of AI and BT. The primary findings reveal that the most critical adoption barriers are organizational and environmental, and not technological. Specifically, the organizational dimension is stunted by the high economic friction within the heavily fragmented Micro, Small, and Medium Enterprises (MSME) sector (Amit Kapoor et al., 2025), which face immense capital expenditure demands (Li et al., 2024) and limited access to formal credit (a credit gap estimated at 24%) (SIDBI, 2025). Environmentally, the lack of standardized data protocols (Yadlapalli A, Rahman S, Gopal P (2022; Kaur, J.,  et al., 2022), lack of regulations  regarding Distributed Ledger Technology (DLT) governance (NITI Aayog, 2020), and continuous physical infrastructure deficits (NLDSL, n.d.) together erode the perceived value and trustworthiness of these technologies. The analysis discovers that a strategic digital divide exists, wherein policy efforts like the Unified Logistics Interface Platform (ULIP) are pulled down by bottom-up operational resistance stemming from financial fragility and human capital deficits (NITI Aayog, 2025; NLDSL, n.d.). The study proposes strategic recommendations, advocating operational expenditure (OpEx) models, compulsory data standardization, and timely regulatory clarity concerning DLT legal frameworks (NITI Aayog, 2020) to ensure India’s digital transformation efforts bear measurable improvements in logistics efficiency and cost reduction (currently 7.97% of GDP) (DPIIT/NCAER, 2025; ITLN, 2025).