Growth

Growing at a rate of 30-40 percent per annum, the Indian logistics industry is capturing a both domestic and international player which holds tremendous growth potential for the growth potential for the growing Indian economy.

The annual logistics cost in India is estimated to be 14% of the GDP, which translates into USD 125 billion assuming the GDP of India to be slightly over USD 1 trillion. Out of this USD 125 billion logistics cost, almost 99% is accounted for by the unorganized sector (such as major poor warehouse infrastructure, less containerized vehicle , unorganized transport industry, small warehouse operators, customs brokers, freight forwarders, etc.), and slightly more than 1% approximately USD 1.5 billion is contributed by the organized sector. So, one can see that the logistics industry in India is in a nascent stage.

However, the Logistics Industry is growing at a fast pace 30-40 % and if India can bring down its logistics cost from 14% to 9% of the GDP (level in the US), savings to the tune of USD 50 billion will be realized at the current GDP level, making Indian goods more competitive in the global market. Moreover, growth in the logistics sector would imply improved service delivery and customer satisfaction leading to growth of export of Indian goods and potential for creation of job opportunities.

The logistics industry has witnessed decent growth in recent times and has tremendous potential as it facilitates significant cost reduction and offers manufacturers/retailers the ability to focus on core activities. However, the use of other value-added advance services such as customer support, inbound logistics and reverse logistics, is still very limited in the Indian context.