Indian logistics market to reach Rs 13.4 trillion by FY28
WAREHOUSING & LOGISTICS

Indian logistics market to reach Rs 13.4 trillion by FY28

The Indian logistics market, valued at Rs 9 trillion in FY23, is forecasted to grow to Rs 13.4 trillion by FY28, achieving a compounded annual growth rate (CAGR) of 8-9%, according to a report by Motilal Oswal.

This expansion is driven by structural changes, technological innovations, and government initiatives focused on reducing logistics costs and enhancing infrastructure. The National Logistics Policy, introduced in September 2022, aims to optimise India’s logistics framework by increasing the share of railways in freight movement—currently at 18%—through the development of dedicated freight corridors (DFCs), along with improvements in road infrastructure and the expansion of inland waterways.

As of April 2024, DFCs are 96% complete, which is expected to significantly enhance the capacity and efficiency of rail freight and increase its share in the overall transportation mix. The government’s initiative to privatise ports has also improved infrastructure and operational efficiency at Indian ports, benefiting major operators such as Adani Ports and SEZ (APSEZ) and JSW Infrastructure.

Currently, logistics costs in India account for 14% of GDP, considerably higher than the 8-9% range found in developed nations. This disparity is largely due to an imbalanced modal mix, where road transport constitutes 71% of freight movement, while railways and waterways contribute much less. To address these inefficiencies, the government has rolled out significant reforms like the Goods and Services Tax (GST) and has heavily invested in road infrastructure, inland waterways, and DFCs. These efforts aim to reduce the logistics cost-to-GDP ratio to 8-9% in the coming years, aligning with global standards.

The logistics market is highly diversified, encompassing road transport, rail transport, air cargo, multimodal logistics, and industrial warehousing. The domestic express logistics segment is anticipated to grow even faster, with a projected CAGR of 14% from FY23 to FY28, largely fueled by the expansion of e-commerce.

Organised players, who currently control about 80% of the market, are expected to strengthen their position by leveraging government policies like the e-way bill and GST. Additionally, the less-than-truckload (LTL) segment in road transportation is forecasted to experience significant growth, with a projected CAGR of 10%, driven by the rising demand for smaller and more frequent shipments that bypass warehouse storage and reach retailers directly. (ET)

The Indian logistics market, valued at Rs 9 trillion in FY23, is forecasted to grow to Rs 13.4 trillion by FY28, achieving a compounded annual growth rate (CAGR) of 8-9%, according to a report by Motilal Oswal. This expansion is driven by structural changes, technological innovations, and government initiatives focused on reducing logistics costs and enhancing infrastructure. The National Logistics Policy, introduced in September 2022, aims to optimise India’s logistics framework by increasing the share of railways in freight movement—currently at 18%—through the development of dedicated freight corridors (DFCs), along with improvements in road infrastructure and the expansion of inland waterways. As of April 2024, DFCs are 96% complete, which is expected to significantly enhance the capacity and efficiency of rail freight and increase its share in the overall transportation mix. The government’s initiative to privatise ports has also improved infrastructure and operational efficiency at Indian ports, benefiting major operators such as Adani Ports and SEZ (APSEZ) and JSW Infrastructure. Currently, logistics costs in India account for 14% of GDP, considerably higher than the 8-9% range found in developed nations. This disparity is largely due to an imbalanced modal mix, where road transport constitutes 71% of freight movement, while railways and waterways contribute much less. To address these inefficiencies, the government has rolled out significant reforms like the Goods and Services Tax (GST) and has heavily invested in road infrastructure, inland waterways, and DFCs. These efforts aim to reduce the logistics cost-to-GDP ratio to 8-9% in the coming years, aligning with global standards. The logistics market is highly diversified, encompassing road transport, rail transport, air cargo, multimodal logistics, and industrial warehousing. The domestic express logistics segment is anticipated to grow even faster, with a projected CAGR of 14% from FY23 to FY28, largely fueled by the expansion of e-commerce. Organised players, who currently control about 80% of the market, are expected to strengthen their position by leveraging government policies like the e-way bill and GST. Additionally, the less-than-truckload (LTL) segment in road transportation is forecasted to experience significant growth, with a projected CAGR of 10%, driven by the rising demand for smaller and more frequent shipments that bypass warehouse storage and reach retailers directly. (ET)

Next Story
Infrastructure Energy

Oil Prices Rise Amid Iran-Israel Tensions Despite Record U.S. Output

Oil prices increased due to reports that Iran was preparing a retaliatory strike on Israel from Iraq, although record output from the United States tempered these gains. Brent crude futures rose by 29 cents, or 0.4%, to settle at $73.10 a barrel, while U.S. West Texas Intermediate (WTI) crude gained 23 cents, or 0.3%, closing at $69.49. Both benchmarks had reached session highs of over $2 a barrel earlier in the day. Analyst Ole Hvalbye from SEB Research commented that any Iranian response might be restrained, similar to Israel's limited strike from the previous weekend, suggesting that such a..

Next Story
Infrastructure Urban

South and Southeast Asia to Invest Over $20 Billion in EV Development

A recent report by S&P Global Ratings projects that South and Southeast Asia will invest over $20 billion in electric vehicle (EV) development in the coming years, with India poised to attract significant EV-related investments. The report highlights India's vast market potential as a key driver for this growth. According to the report, the Tata and JSW groups are expected to invest over $30 billion in EVs and EV materials over the next decade, with approximately $10 billion allocated specifically for projects in South and Southeast Asia. The adoption of electric vehicles in India is anticip..

Next Story
Infrastructure Urban

India and Saudi Arabia Explore Collaboration in Emerging Sectors

India and Saudi Arabia are exploring partnerships in emerging fields such as fintech, new technologies, energy efficiency, clean hydrogen, textiles, and mining to strengthen trade and investment ties, an official statement revealed on Friday. The discussions took place during Commerce and Industry Minister Piyush Goyal's visit to Riyadh, where he co-chaired the second meeting of the Economy and Investment Committee under the India-Saudi Strategic Partnership Council (SPC) with Saudi Energy Minister Abdulaziz bin Salman Al-Saud on October 30. These sectors were identified as high-potential are..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000