Logistics Service Market in India 2023-2028

The Indian logistics services market is witnessing transformative growth, driven by government initiatives, digital integration, and a thriving e-commerce sector. As a backbone of the economy, logistics ensures efficient movement of goods across sectors, contributing to global competitiveness. The market benefits from policies like the National Logistics Policy and PM Gati Shakti, which aim to enhance multimodal connectivity and reduce logistics costs.

Market insights:

The logistics services market in India was valued at INR 23.31 Trn in 2023 and is expected to reach INR 57.41 Trn during the 2024 ─ 2029 forecast period, expanding at a compound annual growth rate (CAGR) of ~16.40%.

The market is set to grow significantly, driven by a diverse economy and robust manufacturing. Infrastructure advancements, such as dedicated freight corridors and smart logistics hubs, enhance capabilities. The Unified Logistics Interface Platform (ULIP) and Logistics Data Bank have digitized the sector, improving tracking and efficiency. A World Bank report ranks India 38th in logistics performance, showcasing continuous improvements. Favourable foreign investment policies and public-private partnerships further catalyse the market's expansion.

Segment insights:

The market is segmented into ─ transportation, warehousing, and supply chain management.

Transportation includes road, rail, air, and maritime logistics. Rail electrification and integrated transport solutions are gaining prominence. With increasing demand for cold storage and smart warehouses, the warehousing segment plays a crucial role in supply chain optimization. Innovations like automated systems are redefining warehousing. Advanced technologies, such as AI and IoT, are improving supply chain visibility and real-time decision-making, addressing challenges in demand forecasting and inventory management.

Market Trends:

The Indian logistics sector is undergoing a significant transformation driven by technological advancements and sustainability goals. Key trends include the rise of green logistics, with companies adopting fuel-efficient vehicles, renewable energy in warehouses, and carbon-neutral practices. Blockchain integration is enhancing supply chain transparency, while drone technology is revolutionizing last-mile delivery, particularly in rural areas. E-commerce growth has spurred demand for faster delivery, leading to innovations like autonomous vehicles and micro-fulfilment centres.

Opportunities abound with government-backed projects like PM Gati Shakti, which promotes multimodal logistics parks and infrastructure development to reduce transit times and costs. The focus on Tier-2 and rural areas, fuelled by increasing digital penetration, creates a fertile ground for logistics expansion. Enhanced port automation and initiatives under the National Logistics Policy further position India as a competitive global trade hub.