Growth drivers for Indian logistics industry –

Several initiatives undertaken by the Government of India as well as increased IT penetration have boosted the Indian logistics segment, which is set to grow manifold in the coming years

The Indian logistics sector, which was pegged at US$75.19 billion in 2009, has greatly evolved with enhancement and improvisation of logistics services. In the past, logistics was limited to movement of goods through rail, road and waterways from restricted number of cities and ports. Presently, logistics services are not only restricted to the movement of goods but have expanded to include warehousing, storage, packaging, disposal, tracking, supply chain management and much more.

The industry has grown rapidly since the past 10 years and various drivers have contributed to the rapid growth of the sector. Major drivers of this robust growth are initiatives undertaken by the government, increased usage of IT, improved service offerings and organised nature of retail and manufacturing sectors, among others.

Role of government

The Government of India (GoI) has played a significant role in providing the right impetus to this sector by implementing various laws and taxes. Some of the measures undertaken by the government include:

·         Increase in private participation of rail freight

·         Setting up of special economic zones (SEZs) resulting in increased trade

·         Privatisation of inland container depot (ICD) for sea freight

·         Airport expansion with dedicated cargo terminals

·         Improved road infrastructure with better connectivity

·         Foreign direct investments (FDI) in the commercial vehicle segment leading to usage of better quality vehicles

·         Revision of import duty for fast moving consumer goods (FMCG)

·         Bilateral agreements to promote export-import (EXIM) trade