Logistic Industry In India
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Logistic Industry In India
Owing to digitalization and globalization, the Logistic Industry in India has become a crucial sector in boosting international trade. The logistic and freight industry of India is evolving rapidly. It is the artery of Indian economy as it ensures quick, efficient and economical transport of goods across India, with many commercial sectors relying upon it for sustenance. Modern technological innovations and advancements have most definitely increased the efficiency base of Indian Logistics sector by lending it extra combined operating models
- Currently valued at $160 Billion, the Indian Logistics Sector is expected to rocket up to $215 Billion in the coming 2 years.
A feather in its cap, India’s rank, in terms of overall logistics performance, shot up from 54th rank, in 2014, to 44th position, in 2018, in the World Bank Logistics Performance Index (LPI)
A fast growing sector, the Indian logistics sector employs more than 22 million people.
Current Logistics of Indian Logistics Industry
The Indian Logistics Industry comprises of inbound and outbound sectors of production and of service supply chains. However, lately, the logistics infrastructure has been receiving a much- needed focus and spotlight from business companies and policymakers. This has resulted in big time changes in the logistics marketplace. With the implementation of advanced technology, the planning, implementation, and control of goods movements have become much faster and more efficient.
Modern processes offer great support in various supply chain infrastructures. These innovative logistics processes involve advanced technological knowhow, improved methods and new strategies to boost and attain profitability for businesses that offer transport services in Vadodara and other parts of the country.
Goverment Initiatives for Indian Logistics Sector
In view of the immensely important role played by the Logistics Industry in India, the Indian Government has undertaken many initiatives to improve and enhance the business environment and efficiency of Indian Logistics Industry.
- A new Logistics Division has been set up in Department of Commerce to coordinate the integrated development of the logistics sector. This involves policy changes, improvement in existing procedures, identification of bottlenecks and gaps, and introduction of technology-based interventions.
- Government investment in Indian logistics sector, to strengthen its infrastructure, has received an impetus and is expected to touch $500 Billion annually, by 2025.
- Launching of Multi-Model Logistics Parks Policy (MMLPs) is another initiative by the Government to improve the Indian logistics sector. MMLP lowers the freight costs, reduces vehicular pollution and congestion, and also cuts down warehouse costs to promote domestic and global trade.
- Another interesting initiative is the National Logistics Portal. A National Logistics Portal is being developed in phases to serve as a transactional e-marketplace. A connection link between buyers, logistics service providers and relevant government agencies is proposed to be created. This portal is touted to be a single window market place to link all stakeholders.
- Government has also approved of the commissioning of a Logistics Data Bank. As part of the India- Japan bilateral cooperation, a Logistics Data Bank Project has been commissioned to track containers on a ‘near-real-time’ basis. RFID tags are placed on every container coming out of the ports, to track cargo movement. The project has already expanded to various ports in India, and covers almost 90% of the total container volumes in India.
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Challenges Faced By Indian Logistics Sector
The Logistic Industry in India, like any other industry, has its fair share of challenges to be addressed
- Red tape and varying rules and regulations at different stages, enforced by national, regional and local authorities is a big obstacle. It creates unnecessary gaps and hiccups in the smooth functioning of the Logistic Industry in India.
- Poor warehousing and distribution facilities, lack of proper integration in the transport networks, and incompetency in handling information technology pose a major challenge for businesses dealing in the Indian Logistics sector.
In the modern scenario, Indian logistics sector needs skilled manpower. Lack of requisite training institutions leads to a technologically challenged workforce. This creates various issues of errors and administrative gaps amongst employees and logistics managers, hampering a smooth functioning.
Adding to the woes, poor management and storage facilities translates into major loss, damage and deterioration of material, specially in the perishable segment. Good refrigerated storage and containers, and their proper maintenance is much needed in the Indian Logistics sector.
Some of the major challenges that need to be addressed are-
- Building of a sound Infrastructure.
- Managing requirements of various sectoral supply chains,
- Changing industrial policies to ensure efficient production and transportation of
- Deploying of effective managerial practices and
Overcoming these challenges goes a long way in enhancing competency and efficiency of the Indian Logistic Industry. However, it is commendable that despite various challenges and peculiarities, the Logistic Industry in India is constantly transforming and upgrading by developing innovative business models, by outsourcing their supply chain operations to 3PL services providers and by removing structural and policy-based stringencies.
Blog: Logistic Industry in India