The content of this report will be updated with the latest scenarios based on the global COVID-19 Pandemic
The India Freight and Logistics Market is estimated to grow at a CAGR of approximately 6% during the forecast period.
India was ranked 54th in the logistics industry as per the global Logistics Performance Index in 2014. The ranking jumped to 35th in the year 2018. Multi-Modal Logistics Parks Policy (MMLPs) The MMLPs is a key policy initiative of the Government of India to improve the country’s logistics sector. This initiative will lower freight costs, reduce vehicular pollution and congestion, and cut warehouse costs to promote domestic and global trade.
With about 1.2 crore total retail outlets in India out of 3 crores in the world, the industry is largely dependent on the first mile and last-mile logistics which is the spine for intra-city logistic movement.
Apart from upgrading the existing ports, the government has also taken initiatives to develop six new ports. These locations were selected after conducting a detailed study and identifying the cargo flow for key commodities and the projected life. These ports are proposed to be developed at Vadhavan in Maharashtra, Tajpur in West Bengal, Paradip Outer Harbour in Odisha, Cuddalore/Sirkazhi in Tamil Nadu, Belikeri in Karnataka, and one more port in Enayam in Tamil Nadu, which is a transshipment port.
The presence of unorganized players in the Indian logistics industry leaves it fragmented, with organized players accounting for a mere 10% share of the total market. With the consumer base of the sector including a wide range of industries, like retail, automobile, telecom, pharmaceutical, and heavy industries, the logistics industry has been increasingly attracting investments in the last decade.
Key Market Trends
Increase in Road Infrastructure:
India is setting new standards for Green Highways, Cabinet recently approved up-gradation and rehabilitation works for a total length of 780 kilometers of national highways across the country. The national highways span over states of Himachal Pradesh, Andhra Pradesh, Rajasthan, and Uttar Pradesh. The unique roadways infrastructure project will involve green cover and utilization of reusable material while laying roads. The total cost of the government’s mega Green Highway project is INR 7662.47 crore which also involves a loan component of INR 3500 crore or USD 500 million. The World Bank will provide the loan under the Green National Highways Corridor Project (GNHCP).
The Government of India (GoI) is planning to expand the national highway network to over 200,000 km. The Government launched the Bharatmala Pariyojana, which aims to build 66,100 km of economic corridors, border, and coastal roads, and expressways to boost the highway network. It is envisaged that the program will provide 4-lane connectivity to 550 districts, increase vehicular speed by 20-25% and reduce the supply chain costs by 5-6%. The first phase of the programme will bring in USD 82 bn investments by 2022 for the development of 34,800 km of highways.
E-commerce driving the logistics Industry:
With growing internet penetration, internet users in India are expected to increase from 445.96 million in 2017, to 829 million by 2021. In December 2018, internet subscribers in India stood at 604.21 million people.
Each month, India is adding approximately 10 million daily active internet users to the internet community supporting the e-commerce industry, which is the highest rate in the world. Online shoppers in India are expected to reach 220 million by 2025.
The effect that the global COVID - 19 outbreak, and the Indian lockdown that followed, the Indian eCommerce sector has benefited from the lockdown so far. Indians can no longer go to supermarkets or malls and have moved quickly to getting daily products numbers online, online shopping to grow even faster in the coming months
The India freight and logistics market is fragmented, both international and local players are present in the market. The market is expected to grow during the forecast period due to huge investments are pouring for the infrastructure sector from the government and e-commerce is rapidly growing in the country and many other factors are driving the market.
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