India’s Logistics Sector Expected to Reach Worth USD 215 Billion by 2020-21


India’s logistics sector is shining bright. The current size of the logistics industry in the country is worth around USD 160 billion. The sector is growing fast and it is expected that the industry will touch worth USD 215 billion by 2020-21, at a compounded annual growth rate (CAGR) of 10.5 percent.

India’s logistics industry is growing rapidly and has emerged as an industry of billions dollar. The sector is providing employments a large mass.

At present, the sector is employing more than 22 million people. In the last five years, it has grown at CAGR for 7.8%. It will continue its growth in the upcoming years.

It is expected to reach USD 215 billion by 2020-21 at a CAGR of 10.5%.

What are the key drivers in creating a roadmap for growth and boom in India’s logistics industry?

There are several factors that are playing a pivotal role in the boom of the Indian logistics industry. The development of logistics-related infrastructure, the implementation of GST and relaxed FDI regulations, the granting of infra status, and the emergence of cutting-edge technology are the key factors that are building a significant roadmap for the boom in the Indian logistics industry.

There are three main key drivers in the boom of India’s logistics industry.

  • The Infrastructure Development

The Government of India has done an excellent job in the development of logistics-related infrastructure. The government is endeavoring positively to revolutionize the functionalities of Indian logistics.

Several key infrastructure development projects have been rolled out that are booming India’s logistics sector.

  • The Regulatory Boost

One another reason for growth and boom in the logistics sector is the regulatory boost. The Indian government is working to introduce a new logistic plan in the country.

The objective of the new plan is to formulate the most economical method to transport goods by the year 2035. The roll-out of GST has been the game-changer in the logistics industry.

The implementation of GST has strengthened the growth rate of the industry. It is helping the industry in a substantial way to get into an organized sector.

The Indian government also has made several reforms intending to make tremendous growth in the industry.

Recommended Reading: What are GST Rates for Movers and Packers in India?

  • The Emergence of Cutting-Edge Technologies

The emergence of cutting-edge technologies, tech-enabled logistics start-ups, and integrated logistics plan also have helped in the boom of India’s logistics sector.

The tech-enabled logistics start-ups have a huge scope to grow in the upcoming years. They have the potential to revolutionize the transport and logistics industry.

Now more and more logistics companies are moving toward leveraging the benefits of new-age technologies such as Chatbots, online tools, instant price estimator and a lot more.

Recommended Reading: Leveraging Technology to Metamorphose India’s Relocation Industry

India’s Logistics in Current Scenario

In the current scenario, the logistics industry of India is largely dominated by transportation.

In terms of value, the transportation accounts for 85% share. And the rest 15% share is accounted for warehousing & storage. Depending upon the different cities, the share may vary.

A large part of India’s logistics industry is still unorganized and highly fragmented. There are still several unorganized players in the industry that making the industry fragmented.

There are a few organized players in the industry. The ratio of organized players and unorganized players in the logistics sector of India is 1:9. It means there are only 10 percent organized players in the Indian logistics industry.

The Challenges in India’s Logistics Industry

At present, the Indian logistics industry is also facing several challenges that are creating hindrance in the growth rate. Failing to new-age technologies, minimal integration of IT infrastructure, fragmented warehousing sectors, underdeveloped material handling infrastructure, multiple regulatory bodies, and lack of seamless transit of goods across various modes are some challenges that need to be curbed to see tremendous growth and boom in India’s logistics sector.

The Bottom Line

Undoubtedly, India’s logistics industry is growing rapidly and expected to reach worth USD 215 billion by 2020-21. But the future of this industry can go to shine ever brighter.

There is a need to curb the challenges faced by the industry. There is a need to focus on new technologies, employment of skilled workforces, training to workforces, improved investment, automation, improved the transport system, organized warehousing & storage spaces and organized packers and movers sector.

With these improvements, India’s logistics industry certainly shire brighter.

Disclaimer: This article has been prepared by doing proper research exploring various industry reports and related articles. We don’t guarantee for the accuracy and completeness of the information given in this article. However, for our best efforts, we have tried to provide you the right information.

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