India Logistics Market Outlook to 2028

India Logistics Market Overview

The India logistics market is valued at USD 282 Billion, driven by the rapid growth of e-commerce, expansion of retail, and government initiatives such as the National Logistics Policy (NLP). This comprehensive framework aims to improve logistics infrastructure, reduce the cost of logistics from 13-14% of GDP to 8%, and enhance India's trade competitiveness. Significant investments in multi-modal transportation, warehousing, and last-mile connectivity are playing key roles in the markets expansion, especially as the country positions itself as a global manufacturing hub.

Major cities such as Mumbai, Delhi, Bengaluru, and Chennai dominate the logistics market due to their robust infrastructure, proximity to ports, and high levels of industrialization. These cities act as gateways for both domestic and international trade. Mumbais proximity to Jawaharlal Nehru Port Trust (JNPT) and Delhis strategic position near the NCR region have further enhanced their dominance. Additionally, Bengalurus thriving tech industry and Chennais automotive sector contribute to their significance in the logistics sector.

The National Logistics Policy, introduced in 2022, is aimed at reducing logistics costs, improving supply chain efficiency, and promoting sustainable growth in the logistics sector. It provides a framework for building an integrated logistics ecosystem by focusing on reducing inefficiencies in freight movement, improving last-mile connectivity, and enhancing multi-modal transport. By 2024, it is expected to streamline operations across all logistics sub-sectors, saving 6 lakh crores annually.

India Logistics Market Segmentation

By Mode of Transport: The market is segmented by mode of transport into road, rail, air freight, and sea freight. Among these, road transport holds the dominant market share, primarily due to its flexibility, reach, and the fact that over 60% of India's freight moves by road. The road transport segment benefits from the governments ongoing investments in road infrastructure, including projects such as the Bharatmala project, which aims to enhance road connectivity across the country. Additionally, the high level of informal logistics players contributes to the segment's market share dominance.

By Service Type: The market is further segmented by service type into freight forwarding, warehousing, supply chain management, and value-added services such as packaging and labeling. Freight forwarding dominates the service type segmentation, driven by the increasing complexity of logistics solutions required by various industries. With India's growing participation in global trade, freight forwarders play a critical role in ensuring smooth cross-border movements of goods. Leading companies in this segment are continuously improving their service portfolios through technology adoption, contributing to the segment's growth.

India Logistics Market Competitive Landscape

The India logistics market is highly competitive, with a mix of domestic and international players. These companies are investing heavily in technology and infrastructure to improve efficiency, lower costs, and cater to the evolving needs of industries such as e-commerce, automotive, and retail. The market is dominated by a few major players, including Blue Dart Express Ltd., Allcargo Logistics, and Gati Ltd., among others. Their dominance can be attributed to established infrastructure, extensive service portfolios, and significant capital investments in technology, including AI-driven logistics and automation in warehousing.

Company Name

Established Year

Headquarters

Fleet Size

No. of Warehouses

Annual Revenue (INR)

Technology Adoption

Regions Covered

Service Types

Key Clients

Blue Dart Express Ltd.

1983

Mumbai

Allcargo Logistics

1993

Mumbai

Gati Ltd.

1989

Hyderabad

Delhivery Ltd.

2011

Gurugram

Mahindra Logistics

2000

Mumbai

India Logistics Industry Analysis

Growth Drivers

Rapid E-commerce Growth: Indias e-commerce market is expanding rapidly, leading to a significant increase in logistics demand. With over 1.3 billion people, the penetration of online retail has surged. The number of online buyers is expected to reach over 500 million by the end of 2024. This massive growth in e-commerce is creating higher demand for efficient logistics solutions. According to India Post, the number of parcels handled in the country increased by 25% in 2023, with projections of further growth. This expansion places additional pressure on logistics firms to optimize delivery systems across the country.

Infrastructure Expansion: Indias logistics infrastructure is undergoing major upgrades, including the Sagarmala initiative, which aims to modernize over 574 ports. In 2023 alone, the Indian government approved 56 projects, worth 5,500 crores, to improve port infrastructure. Additionally, the Bharatmala Pariyojana project targets the construction of 65,000 km of highways by 2025. Improved road networks and upgraded ports will streamline freight movement across India, further driving the growth of the logistics sector. Railways are also expanding freight corridors with an expected 40% increase in capacity by 2025.

Increased Demand for Cold Chain Logistics: India's cold chain logistics sector is experiencing rapid growth, driven by demand in the pharmaceutical, agriculture, and FMCG sectors. In 2024, India's cold chain market is expected to have over 40 million metric tonnes of cold storage capacity, with significant investments into temperature-controlled logistics. With the pharmaceutical sector worth 1.5 trillion and perishable agricultural exports rising to $5.2 billion in 2023, cold chain logistics is becoming vital for maintaining the integrity of goods. This demand is leading to more robust cold chain networks across India.

Market Challenges

Complex Regulatory Environment: Indias logistics sector faces significant challenges due to its fragmented regulatory landscape, including state-level taxes and complex multi-modal policies. Despite the introduction of GST, which improved interstate movement, there are still discrepancies in regional taxation and compliance requirements. In 2023, the World Bank's Logistics Performance Index ranked India 38th, citing regulatory inefficiencies as a major hindrance to improving supply chain performance. Multiple clearances for cross-border and multi-modal transport remain barriers to seamless logistics in India.

Fragmented Market Structure: India's logistics market is fragmented, with over 80% of the sector operated by unorganized players. The lack of integration among regional logistics providers leads to inefficiencies in delivery times and costs. Regional disparities in infrastructure, particularly in rural areas, further complicate logistics operations. In 2023, the Indian logistics sector employed over 22 million people, yet over 70% of these workers operate in the unorganized sector, reducing standardization and contributing to delays and cost overruns.

India Logistics Market Future Outlook

Over the next five years, the India logistics market is expected to witness substantial growth driven by government initiatives, continued infrastructure development, and the rise of e-commerce. With the National Logistics Policy in place, the logistics sector will experience greater efficiency, cost reductions, and improved international trade. Moreover, advancements in logistics technology, such as AI, automation, and blockchain, will continue to shape the market's future. Additionally, the development of dedicated freight corridors and multi-modal logistics hubs is expected to enhance operational efficiency across the country.

Future Market Opportunities

Adoption of Technology: The logistics sector is embracing technological advancements like AI, automation, and blockchain to optimize supply chain management. AI-driven solutions for route optimization, coupled with automation in warehousing, have the potential to increase productivity by 20-25%. Blockchain technology is also gaining traction for enhancing transparency and reducing fraud in freight management. In 2023, India witnessed an increase in AI-based logistics startups, with over 300 new companies developing solutions for supply chain management. These technologies offer an opportunity for Indias logistics market to enhance efficiency and reduce operational costs.

Expansion of Warehousing Capacity: Indias warehousing sector is expanding at a fast pace, driven by demand from e-commerce and retail. In 2023, India had over 265 million sq. ft. of warehousing space, a figure expected to grow by 50% by 2025. Smart warehousing solutions, which include Io T-based systems, are being adopted for better inventory management. Additionally, green logistics is gaining importance, with more companies investing in eco-friendly warehousing solutions. The rise of solar-powered warehouses is helping logistics firms reduce their carbon footprint while enhancing operational efficiency.

Vertical Table for Segmentation

Segment

Sub-Segments

Mode of Transport

Road Transport

Rail Transport

Air Freight

Sea Freight

Service Type

Freight Forwarding

Warehousing

Value-added Services

Supply Chain Management

End-User Industry

Retail, Manufacturing

Healthcare & Pharmaceuticals

FMCG

Automotive

Region

North

South

West

East

Major Players in the India Logistics Market

Blue Dart Express Ltd.

Allcargo Logistics

Gati Ltd.

Delhivery Ltd.

Mahindra Logistics

VRL Logistics Ltd.

Snowman Logistics

Transport Corporation of India (TCI)

Safexpress Pvt. Ltd.

DHL Express India

DTDC Express Ltd.

Rivigo Services Pvt. Ltd.

TVS Supply Chain Solutions

Ecom Express

Future Supply Chain Solutions
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