Indian Logistics Industry is expected to grow at a CAGR of 8.6 percent between 2015 and 2020, which grew at a CAGR of 9.7 percent during 2010-2015. Transportation and Communication accounted for 7.0 percent of the nation’s GDP in 2015, accounting for around US $130.44 billion. The key drivers of this growth are infrastructure investment associated with ports, airports, and other logistics development plans, domestic demand growth and increasing trade.
The Indian logistics industry is fragmented and under developed. Logistics costs are relatively high due to poor physical and communication infrastructure; high dwell time at ports; low levels of containerization; and a multi-layered tax system contributing to significant delays at border crossing points.
Development of transportation and logistics-related infrastructure such as dedicated freight corridors, logistics parks, free trade warehousing zones, and container freight stations are expected to improve efficiency. Government reform initiatives, promotion of manufacturing and trade, improving investment climate are expected to transform the industry and drive growth between 2016 and 2020.
Economic reforms, trade cooperation, improved transportation infrastructure, and industrial growth is ushering in increasing opportunities for the logistics service providers (LSPs) in India. Presently, the Indian logistics industry is witnessing development and expansion of its existing infrastructure, emergence of e-commerce specific logistics solutions, has a strong focus on manufacturing, but also has a large presence of unorganized service providers.
Key trends observed in the Indian logistics industry are:
- Government initiatives to promote the manufacturing sector and exports are likely to increase the demand for logistics functions. Trade with Asia, Europe, and North America are likely to remain major drivers for freight forwarding and transportation companies in the region.
- Major investments by both public and private sectors in the last five years on infrastructure, technology upgrades and expansion of sea and airport facilities, and dedicated logistics corridor in the rail network are expected to strengthen the Indian logistics infrastructure.
- The booming e-commerce market in India is bringing in new opportunities for LSPs. The evolving business model(s) in this space focuses on containing logistics and delivery costs.
- The expected implementation of nationwide uniform GST is likely to transform the distribution structure of majority of industries as it eliminates the need for dedicated warehouses for each individual administrative region.
Key Topics Covered:
1. Executive Summary
2. Overview of Global Trends and Issues
– Global Trends – Geopolitical, Economic, and Financial Developments and Issues
– Global Oil Supply and Demand Imbalance
– Crude Oil Outages – Unplanned Outages by the OPEC
– Global GDP Growth – Economic Uncertainties to Continue to Hamper Global Growth
3. India-Economic Trends
– India Set to Represent about 4% of Global GDP by 2020
– “Make in India” to Revive Manufacturing and Improve Logistics Infrastructure
– Major Industrial Clusters in India
– Manufacturing Products Comprise of More than 50% Exports
– Asian Trade Dominated by Manufacturing Goods
– South Asian Countries Accounted for about 3% of India’s Trade
– Asia, Europe, and America Remain Key Destinations for Exports
– Foreign Trade Policy (2015-2020) to Support Trade Growth
– Opportunity to Improve Logistics Efficiency Due to Poor Transportation Infrastructure
– Economic Reforms and Improving Infrastructure Likely to Provide Opportunities for LSPs
– India Can Increase its Transshipment Potential by Improving Logistics Infrastructure
– Macro Drivers of Logistics-Development Plans, Trade, and Infrastructure Investment to Support Growth
4. Overview of the Indian Logistics Industry
– Services Sector Growth Will Be Driven by Construction and Robust Trade Sectors
– Overview of Indian Economy and Share of Logistics Sector
– Logistics Expenditure in Key Industries
– Transportation and Logistics Industry Size
5. Freight Activity in India
– Sea Freight Development in India – Total Port Traffic Trends
– Sea Freight Development in India – Traffic at Major Ports
– Sea Freight Development in India – Contribution of Major Ports
– Port Development Initiatives – New Capacity Expansion is Estimated at 1400 MMT by 2025
– Road Freight in India – Transportation Projects to Ease Congestion and Improve Efficiency
– Air Freight in India – Air Cargo Sector Likely to Receive Infrastructure Status
– Air Freight Development – Capacity Constraints Hampers International Air Cargo Growth
– Key Enablers and Challenges
– Transportation and Logistics Industry Size Projection
6. Key Trends Affecting the Indian Logistics Industry
– Economic Trends – External Trade and Foreign Direct Investment
– GST Likely to Alter Logistics Network of Light and Consumer-based Industries
– eCommerce Boom Likely to Drive Warehousing Demand and eLogistics Solutions
– Customer Trend – Logistics Benchmarking and Analysis of End-user Preferences
– Impact of Logistics Industry Trends – Conditions Favorable for Smooth Takeoff
7. Outlook and Growth Opportunities for the Indian Logistics Industry
– LSPs Can Invest in Assets to Reap the Benefits of Reform
– Dedicated Freight Corridors to Lead Modal Shift toward Rail Freight
– “Make in India” Opens up Diverse Growth Opportunities for Logistics Service Providers
– Moving toward Integration of Multi-modal Logistics Infrastructure to Deliver Freight within and across Borders
– Logistics Industry Ready to Take Off
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