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 because of 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 that ranks all countries based on their logistical performance and ease of imports. In this index, India has moved up by 10 ranks from 2014 when India’s rank was 54.
In terms of mode of transportation, the road remains the most preferred medium for transport, although 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. The lead time has reduced the time spent on roads for transporters and increased the number of trips they can now undertake.
- With the e-commerce boom, large-scale transportation of goods has majorly contributed to the growth of the logistics sector
- Reduction in documentation complexities that were required for interstate and cross-border transportation has come 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
- Logistics sector is estimated to reach USD 215 billion by 2020 compared to the 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 percent during the last five years.
- Logistics cost in India accounts for 13-17% of the Gross Domestic Product (GDP), nearly double the logistics cost to GDP ratio in developed countries such as the USA, Hong Kong and France.