India: Driving in the right direction

The logistics industry in India is likely to expand at a rate of 9-10 per cent over the medium- term, according to a recently released report from ICRA. With economic recovery being the key driving factor on the demand side, the trend towards outsourcing of non-core activities like logistics, warehousing and associated activities to integrated players is likely to drive the share of the organised segment, the report said. "The domestic sector is currently in a transformation phase with game-changing trends like implementation of GST, increasing focus by foreign investors across the logistics value chain, growing demand for end-to-end solution providers and emergence of new avenues such as e-commerce, logistics parks, cold chains and new startups. The government's thrust towards building multi-modal transportation infrastructure is also likely to have a significant influence," said Mr Subrata Ray, Senior VP and Group Head-Corporate sector ratings, ICRA. In fact, with an attempt to improve integrated logistics, the government also plans to develop about 35 strategically located multi-modal logistic parks (MMLPs), close to major manufacturing and consumption centres. These initiatives have significant potential to bring down the logistics costs in the country in coming years.

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