Demand pickup, infra creation to grow logistics secto

by IANS |

New Delhi, Oct 23 (IANS) A pick-up in demand along with reforms and construction of support infrastructure is expected to grow India's logistics sector by 10-12 per cent CAGR.

At present, India's logistics market is pegged at $250 billion.

The growth is expected to be supported by the shift from organised to the unorganised sector (90 per cent currently).

According to Motilal Oswal Financial Services, the demand for value added services is also on the rise.

"Most logistics spends are towards transportation, followed by warehouse."

"Based on the reforms undertaken over the last few years, the industry is expected to grow faster over the next few years. Some new business models like a3PL' and aExpress Logistics' would grow faster than the overall sector."

Accordingly, the brokerage house said that driven by reforms such as GST and the construction of support infrastructure will shift the perspective of logistics from just transportation to a specialised function.

"The transport industry is highly unorganised with several small local fleet operators. With GST taxing all levels of value added, the industry would gradually move towards formalisation."

"The higher levels of compliance with GST, along with the reduction in cost competitiveness, would result in smaller players moving out of the system and market share moving towards organized players."

Besides, it predicted that organised players, with large warehousing capacity and the ability to invest would see strong market share gains going forward.

Furthermore, it said that e-commerce and organised retail sector has accelerated the growth of a3PL' market in India.

This segment was largely dominated by the automotive sector, wherein, there is a heavy requirement for warehousing and transportation.

In the past few years, the '3PL' segment is estimated to have clocked over 20 per cent CAGR, with increasing customer adoption and more players entering this space.

Latest News
Modi meets industry leaders in Japan, invites them to invest in India Mon, May 23, 2022, 04:30 PM
Vismaya suicide: Husband found guilty Mon, May 23, 2022, 04:20 PM
Karnataka syllabus revision row: Reviewing of PUC-II history book likely to create stir Mon, May 23, 2022, 04:16 PM
Experts warn of unusual monkeypox outbreak in Aus Mon, May 23, 2022, 04:02 PM
HSBC suspends senior executive who said climate change is being exaggerated Mon, May 23, 2022, 03:56 PM
Debutants Titans face off against Rajasthan Royals in direct ticket to final Mon, May 23, 2022, 03:55 PM
Shadab, Nawaz return for Pakistan's ODI series against West Indies Mon, May 23, 2022, 03:52 PM
Heatwave, reduced wheat production credit negative for India: Moody's Mon, May 23, 2022, 03:46 PM
Rosneft commemorates oilmen feat in World War II Mon, May 23, 2022, 03:23 PM
Karnataka Cong MLA eats food removed from Dalit seer's mouth, video goes viral Mon, May 23, 2022, 03:17 PM
Night markets in Seoul set to reopen after 2 yrs Mon, May 23, 2022, 03:15 PM
WHO honours ASHA workers, PM delighted Mon, May 23, 2022, 03:12 PM
Covid, monkeypox poses formidable challenge to world: WHO Mon, May 23, 2022, 03:07 PM
BJP's tally in Bengal Assembly set to come down below 70 Mon, May 23, 2022, 03:06 PM
Khalistani OGWs asked to target goods trains in Punjab by ISI, Intel agencies warn Mon, May 23, 2022, 03:04 PM