Indian Logistics Industry Outlook, 2020

Advancements in digital technologies, changing consumer preferences due to eCommerce, government reforms, and shift in service sourcing strategies are expected to lead the transformation of the Indian logistics ecosystem.

New York, April 14, 2020 (GLOBE NEWSWIRE) -- announces the release of the report "Indian Logistics Industry Outlook, 2020" -
Digitalization will improve the efficiency and performance in freight management and port operations.

Warehouse automation will help achieve operational efficiencies to counter supply-chain cost pressures in the industry.Increased investment in infrastructure, last-mile connectivity, and emerging technologies are streamlining the logistics landscape in India.

India’s GDP is expected to reach 3.02 trillion in 2020, representing about 4% of the global GDP. Strong growth supported by government reforms, transportation sector development plans, growing retail sales, and the eCommerce sector are likely to be the key drivers of the logistics industry in India. Online freight platforms and aggregators are on the rise in the Indian logistics market, given the need for low entry barriers and less capital investment compared to setting up of an asset-based business model. Manufacturing in India holds the potential to contribute up to 25%–30% of the GDP by 2025 which will drive the growth of the warehousing segment in India. The logistics market in India is forecasted to grow at a CAGR of 10.5% between 2019 and 2025. It has been awarded infrastructure status which has made it easier for investment inflows and has become a major growth driver of the logistics industry. eCommerce is another major segment which is expected to support growth of the logistics industry during the forecast period. Increasing investments and trade point toward a healthy outlook for the Indian freight sector. Port capacity is expected to grow at a CAGR of 5% to 6% by 2022, thereby, adding a capacity of 275 to 325 MT. Indian Railways aims to increase its freight traffic from 1.1 billion tons in 2017 to 3.3 billion tons in 2030. Freight traffic on airports in India has the potential to reach 17 million tones by FY40. Lack of supporting infrastructure, automated material handling systems, and high manual process interference are some key areas where the Indian air cargo industry lags its global peers.Grant of infrastructure status to logistics, introduction of E-Way bill, and GST implementation are set to streamline the logistics sector in India. Setting up of a logistics division under Department of Commerce, technology upgrades, and development of dedicated freight corridors and logistics parks are also major moves to upgrade the logistics landscape.Logistics start-ups in India gained a substantial foothold after the onset of eCommerce, and there are several new companies that are gaining traction in the industry. Online platforms have increased competition and lowered freight costs with real-time data availability and a transparent value chain. It is imperative for logistics service providers to innovate and adapt to the transforming logistics landscape.
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