The logistics sector acts as a backbone for other industries and provides employment to about 22 million individuals in India. This sector has seen robust growth and development in the past few years owing to an increased planned outlay of the government, improved infrastructure facilities and greater access to the capital markets. India was ranked 44th in the Logistics Performance Index 2018 of the World Bank which scores all countries based on their logistical performance and ease of imports. In this index, India has moved up by 10 ranks from 2014, wherein India’s the rank was 54.
In terms of mode of transportation, road remains the most preferred medium for transport, although it is relatively expensive compared to rail. Within the logistics segment, Third-Party Logistics (3PL), a service that allows a business to outsource operational logistics from warehousing to delivery, is expected to grow the fastest.
The introduction of E-Way bill (electronic documentation aimed to track goods movement and prevent tax evasion under GST) from April 2018 is expected to increase transparency as well as encourage further formalisation of the sector in India.
- With the implementation of GST, several regulatory hurdles which transporters used to face earlier including lead time has been reduced. This has reduced the time spent on roads for transporters and increased the number of trips they could undertake.
- With the e-commerce boom, Large scale transport of goods at has majorly contributed to growth of the logistics sector
- Reduction in documentation complexities that were required for interstate and cross border transportation, through online portals for form filling and digitisation in regulatory clearances.
- House of Patels
- VRL Group
- Gati Ltd
- Aegis Group
- Container Corporation of India
- Shreyas Shipping and Logistics
- Arshiya International
- ColdEx Logistics
- Snowman Logistics
- Mahindra Logistics Ltd
- It is estimated that the logistics sector would reach ~USD 215 billion by 2020 as compared to current market size of ~USD 160 billion.
- The Indian logistics industry which provides employment to ~22 million people has grown at a compound annual growth rate (CAGR) of 7.8 per cent during the last five years.
- Logistics cost in India accounts for 13-17% of the Gross Domestic Product (GDP) which is nearly double the logistics cost to GDP ratio in developed countries such as the USA, Hong Kong and France.