Indian logistics market to reach Rs 13.4 trillion by FY28
WAREHOUSING & LOGISTICS

Indian logistics market to reach Rs 13.4 trillion by FY28

The Indian logistics market, which was valued at Rs 9 trillion in FY23, is anticipated to expand significantly, reaching Rs 13.4 trillion by FY28, reflecting a compounded annual growth rate (CAGR) of 8-9%, according to a recent report by Motilal Oswal.

This growth is driven by structural shifts, technological advancements, and government initiatives aimed at lowering logistics costs and enhancing infrastructure. The National Logistics Policy, launched in September 2022, aims to optimize India's logistics framework, focusing on increasing the railways' share in freight movement—currently at 18%—through the development of dedicated freight corridors (DFCs), enhancing road infrastructure, and expanding inland waterways.

As of April 2024, the commissioning of DFCs is 96% complete and is expected to enhance the capacity and efficiency of rail freight, boosting its share in the overall logistics mix. Additionally, the government's push for port privatization has improved infrastructure and efficiency at Indian ports, benefiting major operators like Adani Ports and SEZ (APSEZ) and JSW Infrastructure.

Currently, India's logistics costs account for 14% of its GDP, significantly higher than the 8-9% range seen in developed countries. The skewed modal mix, with road transport making up 71% of freight movement, contributes to these elevated costs, while railways and waterways hold a smaller share.

To address these inefficiencies, the government has implemented key initiatives such as the Goods and Services Tax (GST) and has heavily invested in road infrastructure, inland waterways, and DFCs. These measures aim to reduce the logistics cost-to-GDP ratio to 8-9% in the coming years, aligning India with global standards.

The logistics sector is highly diverse, encompassing road transport, rail transport, air cargo, multimodal logistics, and industrial warehousing. The domestic express logistics segment is projected to grow even faster, with a 14% CAGR over FY23-28, driven largely by the expansion of e-commerce.

Organized players, who currently hold around 80% of the market, are expected to strengthen their dominance, leveraging government policies like the e-way bill and GST. Furthermore, the less-than-truckload (LTL) segment in road transportation is also anticipated to grow, with a projected 10% CAGR, driven by rising demand for smaller and more frequent shipments that bypass warehouse storage to reach retailers directly.

(ET)

The Indian logistics market, which was valued at Rs 9 trillion in FY23, is anticipated to expand significantly, reaching Rs 13.4 trillion by FY28, reflecting a compounded annual growth rate (CAGR) of 8-9%, according to a recent report by Motilal Oswal. This growth is driven by structural shifts, technological advancements, and government initiatives aimed at lowering logistics costs and enhancing infrastructure. The National Logistics Policy, launched in September 2022, aims to optimize India's logistics framework, focusing on increasing the railways' share in freight movement—currently at 18%—through the development of dedicated freight corridors (DFCs), enhancing road infrastructure, and expanding inland waterways. As of April 2024, the commissioning of DFCs is 96% complete and is expected to enhance the capacity and efficiency of rail freight, boosting its share in the overall logistics mix. Additionally, the government's push for port privatization has improved infrastructure and efficiency at Indian ports, benefiting major operators like Adani Ports and SEZ (APSEZ) and JSW Infrastructure. Currently, India's logistics costs account for 14% of its GDP, significantly higher than the 8-9% range seen in developed countries. The skewed modal mix, with road transport making up 71% of freight movement, contributes to these elevated costs, while railways and waterways hold a smaller share. To address these inefficiencies, the government has implemented key initiatives such as the Goods and Services Tax (GST) and has heavily invested in road infrastructure, inland waterways, and DFCs. These measures aim to reduce the logistics cost-to-GDP ratio to 8-9% in the coming years, aligning India with global standards. The logistics sector is highly diverse, encompassing road transport, rail transport, air cargo, multimodal logistics, and industrial warehousing. The domestic express logistics segment is projected to grow even faster, with a 14% CAGR over FY23-28, driven largely by the expansion of e-commerce. Organized players, who currently hold around 80% of the market, are expected to strengthen their dominance, leveraging government policies like the e-way bill and GST. Furthermore, the less-than-truckload (LTL) segment in road transportation is also anticipated to grow, with a projected 10% CAGR, driven by rising demand for smaller and more frequent shipments that bypass warehouse storage to reach retailers directly. (ET)

Next Story
Infrastructure Urban

Andhra Pradesh to Develop 30,000 Women-Led Enterprises by 2025

The Municipal Administration and Urban Development (MAUD) Department is accelerating efforts to create sustainable livelihoods for women in urban areas, in line with Chief Minister Nara Chandrababu Naidu’s goal of fostering one lakh women entrepreneurs by 2025. Under this initiative, the MAUD Department has set a target to establish 30,000 women-led enterprises across towns and cities in Andhra Pradesh. To support this vision, the department plans to establish Micro, Small & Medium Enterprises (MSMEs) for women in TIDCO housing complexes. Vacant plots across 163 colonies have been earmarked ..

Next Story
Infrastructure Energy

G Kishan Reddy discusses mining expansion, clearances with Chhattisgarh CM

Coal and Mines Minister G Kishan Reddy met Chhattisgarh CM Vishnu Deo Sai on Friday to expedite land acquisition and environmental clearances for mining projects. Reddy, who was on a two-day visit to review operations at South Eastern Coalfields Ltd (SECL), discussed measures to boost mining-led economic growth in the state. Key topics included speeding up land acquisition for mine expansions, obtaining quicker environmental approvals, and setting up integrated rehabilitation and resettlement sites. The minister also highlighted the importance of developing critical minerals in the region, alo..

Next Story
Infrastructure Urban

NITI Aayog's Vision for India's Auto Industry

NITI Aayog has launched the report titled "Automotive Industry: Powering India’s Participation in Global Value Chains," offering a roadmap for the country’s automotive future. Released by Shri Suman Bery, Vice Chairman, the report outlines key strategies to grow India’s automotive sector to $145 bn in component production by 2030. India is currently the fourth-largest automobile producer globally, but with only a modest three per cent share in the global automotive component market. The report emphasises the need to strengthen India’s position through competitive manufacturing, skill d..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?