Vibrancy of logistics keeping Indian trade on the move
MUMBAI : The logistics sector plays a crucial role in facilitating trade and commerce within India and with other countries. With an annual market size of over $160 billion, it is one of the fastest-growing industries in the country. Hence, any changes or developments in the economic landscape can greatly impact this sector. Logistics has become an important aspect of the economy in today’s world of hyper-local delivery and real-time inventory management.
Apart from the fact that every sector relies on logistics, it’s important role is in goods transportation, whereby it creates jobs and boosts economic progress. Logistics is important in all markets, from agricultural, medicines and transportation to e-commerce, medical and manufacturing. Most importantly, the logistics industry accounts for 14.4% of India’s GDP.
Furthermore, technical improvements and the government’s promotion of local manufacturing through the “Make in India” initiative are aiding its growth. Currently, the industry employs about 22 million people across tier-I, tier-II and tier-III cities. It is still creating jobs for the unorganized labour force.
Logistics will produce even more employment in the future with the National Logistics Policy (NLP) boost. Another 1.2 million jobs with skill sets in data analysis, business intelligence and real-time technology application, among others, are predicted to be added by FY2025. As a result, the industry will significantly contribute to the social and economic growth.
India is poised to emerge as the global hub for competent supply chain resources and will eventually reach a point where global corporations would look to India to outsource knowledge-based employment in the logistics industry. Moreover, with companies looking to expand their operations or shift production bases to India due to its resilient economy amidst global uncertainties, there will be an increase in investment opportunities within the logistics industry.
This can result in adopting new technology and modernising infrastructure, leading to increased efficiency and capacity building. The rise of e-commerce has also been a significant driving force behind the growth of India’s logistics industry.
With more people turning towards online shopping during lockdowns and continued the preference post-pandemic, there has been an exponential rise in last-mile delivery services provided by logistics players.
The logistics sector in the country is vibrant and expanding swiftly, indicating that it will be a cornerstone of the national economy. The 8.4% GDP growth of the nation is indicative of strong economic progress and logistics sector will stand to gain considerably from this development. Despite facing some hurdles, this sector is on a trajectory of sustained growth, offering prospects for both investors and enterprises. The government’s commitment to enhancing infrastructure, coupled with the burgeoning e-commerce industry, positions logistics as a pivotal force behind the economic development.
Additionally, the sector stands to gain from the widespread integration of technology and the government’s initiative towards a digital economy. This opens avenues for logistics entities to adopt data analytics, AI and machine learning, aiming to boost operational efficacy and elevate the consumer experience. Moreover, the landscape is ripe for international investments as global corporations seek to enter India’s flourishing logistics market. In support of this, the Union government has facilitated foreign participation by permitting 100% foreign direct investment in logistics parks and warehousing, which open the doors for overseas investors.