21-22 November 2019
National Rail Museum, Chanakyapuri, New Delhi
Logistics Expo, Logistics Exhibition, Logistics Conference, Logistics Trade Shows, Logistic Summit, Logistics Expo, Logistics Exhibition, Logistics Conference, Logistics Trade Shows, Logistic Summit

Logistics Market Overview

  • The logistics industry in India, which is currently worth $160 billion, is expected to grow at a CAGR of 10.5 per cent to reach about $215 billion by 2020. The industry has grown at a CAGR of 7.8 per cent during the last five years. This growth is driven by rapid industrial growth, FDI regulations, greater investments in infrastructure development, and increasing trend of outsourcing logistics to third party service providers. The drivers for future growth of this industry will be entry of global players, increase in number of multi-modal logistics service providers, and increasing investments.
  • The Indian logistics industry provides employment to more than 22 million people.
  • The Global Ranking of the World Bank's 2016 Logistics Performance Index shows that India jumped to 35th rank in 2016 from 54th rank in 2014 in terms of overall logistics performance. Notably, India has improved its rank in all the six components of logistics performance index.
  • The Government of India has been working on ways to attract more investments into transport and logistics in order to bolster infrastructure development in the country. In this regard, the grant of infrastructure status to the logistics sector, covering cold chain, inland container depots and warehousing facilities, in November 2017 has been a major milestone. This will be helpful in facilitating the credit flow into the sector with longer tenures and reasonable interest rates and will simplify the process of approval for construction of multi modal logistics facilities (parks) that include both storage and transport infrastructure. Infrastructure status for cold chains and warehousing facilities will provide a big boost to attracting private investment in this sector. Logistics cost is also expected to reduce substantially and it will lead to large-scale employment generation by the sector.
  • Currently, the logistics sector in India is unorganised and fragmented. It is facing several challenges such as high cost of logistics impacting competitiveness in domestic and global market, underdeveloped material handling infrastructure, fragmented warehousing and lack of seamless movement of goods across modes. This calls for integrated development of this sector including focus on new technology, improved investment, skilling, removing bottlenecks, improving inter-modal transportation, automation, single window system for giving clearances, and simplifying processes. Some of these challenges are expected to be addressed by the new logistics division created in the Department of Commerce to develop and coordinate integrated development of the industry. The introduction of GST is expected to reduce logistics costs in the coming years. At present, logistics cost comprises almost 14 per cent of the country’s GDP, whereas in developed countries the spend is around 6-8 per cent only.
  • Improving logistics sector has huge implication on exports; it is estimated that a 10 per cent decrease in indirect logistics cost can increase 5-8 per cent of exports. Apart from increasing trade, better performance in logistics will augment government programmes like “Make in India” and “Ease of Doing Business”, and also enable India to become an important part of the global supply chain. This sector is on the cusp of a higher level of growth and development and the country has the potential to emerge as a global logistics hub.
  • The logistics industry comprises freight transportation via road, rail, air and water, as well as warehousing and cold-storage.
  • Road dominates the mode of freight transport mix in India, constituting about 60 per cent of the total freight traffic. Rail and coastal shipping account for about 32 per cent and 7 per cent respectively, while the share of inland waterways transportation and air is less than 1 per cent each.
  • The Indian transportation industry is continuously growing at a CAGR of 15 per cent. With over seven million goods vehicles moving around the country, the freight volume has currently reached 1,325 billion tonne-km and is expected to double by 2025.