The Indian economy needs to witness some amount of increased growth. In order to do that, the industrial sector needs to flourish. Evolution of the logistics industry wherein goods are facilitated from its point of origin to its point of consumption in a seamless manner will on one hand help in the growth of the industrial sector and, on the other hand, will fulfill the increasing demand for storage and transport functions.
An important point to be noted is that the logistics industry in India has indeed witnessed increasing growth since the past few years. The growth would, however, successfully keep the excessive cost of logistics outside the limelight. On one hand, the total cost to GDP of us logistics sector is around 9.5% and that of Germany is around 8%, whereas, on the other hand, India’s logistics cost accounts to around 14% of the GDP, i.E around $309 billion. This indicates that the cost of logistics in India is high thus resulting in costlier products and uncompetitive exports. The introduction of goods and services tax (GST) is expected to bring an economic upswing to the country. Our economic survey of 2017-18 indicates that Indian logistics sector currently employs more than 22 million of the country.
Talking about modes of transportation, we have: • roads- the roads carry around 65% of freight traffic • railways- railways carry around 26% of total freight in the country. This amounts to 1.1 billion tons of freight over the period of one year. • airways- the air carriers account for freight movement of 2% in volume and 30% in value.
Transportation of freight will eventually lead to the need for warehousing. Indian logistics market has warehousing facilities accounting to around 5%. Ministry of commerce and industry heads the freshly inculcated logistics division in India since its advent in July 2017.