Additionally, the government's push for port privatization has resulted in better infrastructure and improved operational efficiency at Indian ports.

Currently, India's logistics cost as a percentage of GDP stands at 14%, which is much higher than the 8-9% range observed in developed countries.

Key Growth Drivers for India’s Logistics Sector:

---

Government Initiatives and Policy Support:

---

National Logistics Policy (NLP)

The National Logistics Policy (NLP) was introduced in 2022 with the goal of transforming India's logistics sector. The policy aims to reduce logistics costs from the current 14% of GDP to 10% by 2030. It focuses on several key areas, including:

• Enhancing infrastructure such as roads, railways, and ports
• Promoting the adoption of technology in logistics
• Simplifying regulatory processes
• Supporting skill development within the logistics sector

Sagarmala Project

The Sagarmala Project, launched by the Government of India in 2015, is a major infrastructure initiative aimed at modernizing and developing India's coastal infrastructure, including ports, shipyards, and lighthouses. The project is expected to enhance trade and investment in the country and improve logistics efficiency.

Bharatmala Pariyojana

The Bharatmala Pariyojana is a highway development project introduced by the Government of India in 2015. It aims to build a vast network of highways to improve connectivity and reduce logistics costs. The project is set to cover over 83,000 kilometers and will be completed in phases.

Udaan Scheme

The Udaan Scheme, launched in 2017, is a regional connectivity initiative by the Government of India. It seeks to improve air connectivity to Tier II and Tier III cities, helping reduce logistics costs for businesses. The scheme offers financial incentives to airlines for operating flights on regional routes.

e-Logistics Market Platform

Launched in 2018, the e-Logistics Market Platform (e-LMP) is designed to provide a unified platform where logistics service providers and users can connect and conduct business. By offering a transparent and competitive marketplace, the platform aims to reduce logistics costs and improve efficiency.

Other Key Initiatives

---

• Government Investment: The Indian government has significantly boosted investment in the logistics sector, with expectations for annual investment to reach $500 billion by 2025.
• Multi-Modal Logistics Parks (MMLPs): The MMLPs initiative focuses on improving India's logistics sector by reducing freight costs, cutting vehicular pollution and congestion, and lowering warehouse expenses, all of which will promote domestic and international trade.
• National Logistics Portal: A National Logistics Portal is being developed in phases as an e-marketplace to link buyers, logistics service providers, and relevant government agencies, offering a one-stop platform for all stakeholders.
• Logistics Data Bank: In partnership with Japan, the Logistics Data Bank Project tracks containers in near-real-time using RFID tags placed on every container leaving ports. The project, now extended to multiple ports, covers nearly 90% of India's total container volumes.

Factors facilitating the rise of Logistics Sector in India

---

E-Commerce Boom and Last-Mile Delivery:

• The rapid rise of e-commerce in India has fueled the growth of the logistics sector.
• India’s e-commerce sector is projected to grow at a CAGR of 27%, reaching USD 163 billion by 2026, increasing the demand for efficient last-mile delivery.
• This surge has led to the growth of specialized logistics companies and investments in technology-driven solutions.

Infrastructure Development:

Significant investments in transport infrastructure have supported logistics sector growth.

• Improved connectivity through highways, railways, ports, and airports has reduced transit times.
• The Dedicated Freight Corridor (DFC) project is revolutionizing freight movement.
• The National Infrastructure Pipeline (NIP) for FY 2020-25 allocates ₹111 lakh crore, with a focus on transportation.

Growth of 3PL and 4PL Providers:

The increasing complexity of supply chains and demand for specialized services has led to the rise of third-party (3PL) and fourth-party (4PL) logistics providers.

• These companies offer end-to-end supply chain solutions, allowing businesses to focus on their core functions.
• The 3PL market in India is expected to grow by USD 16.77 billion, with a CAGR of 9.45% between 2023 and 2028.

Outsourcing logistics operations will continue to drive growth in this segment.

Warehousing and Cold Chain Development:

Modern warehousing and cold chain infrastructure have become critical drivers of logistics sector growth.

• The Goods and Services Tax (GST) has streamlined warehouse consolidation and promoted large-scale logistics parks.
• Investments in cold chain infrastructure are crucial, particularly for agriculture and pharmaceuticals.
• As of June 2024, the Ministry of Food Processing Industries (MoFPI) has approved several food processing initiatives under the Pradhan Mantri Kisan Sampada Yojana (PMKSY) to boost storage and reduce spoilage.

Growing Export-Import Trade:

India’s expanding role in global trade is driving demand for logistics services.

• Merchandise imports increased by 16.51% to USD 714.24 billion in 2022-23, and exports grew by 6.03% to USD 447.46 billion.
• The India-Middle East-Europe Economic Corridor (IMEC) agreement, signed in September 2023, is expected to enhance trade connectivity, boosting demand for maritime and multimodal logistics services.

---

With our expert guidance and professional support, we will help elevate your brand to new heights. We understand that logistics is the backbone of our economy, and our team of advisors is dedicated to driving seamless value creation for your business.

Our customized services are designed to:

• Enhance your brand image
• Increase market share
• Optimize operations
• Effectively manage risks