The Indian logistics industry is expected to grow at an impressive CAGR of 11%, reaching a size of USD 468 billion by FY2027, says the latest report published by Rubix Data Sciences.
According to the report, roads account for more than 60% share of logistics transportation; there has been a 500% increase in the road transport and highway budget allocation since 2014.With a 500% increase in budget allocation since 2014, road infrastructure has seen remarkable improvements, potentially saving up to Rs. 4.8 trillion annually in logistics costs.
Railway freight loading grew at 5% CAGR from FY2018 to FY2024 and stood at 1,591 million tonnes (159.1 crore tonnes) in FY2024. Rail freight loading has grown steadily, reaching 1,591 million tonnes in FY2024, with dedicated freight corridors enhancing operational efficiency.
The Indian air cargo industry recorded a robust CAGR of 23% from FY2021 to FY2023, overcoming pandemic challenges.
Shipping has also grown, and in FY2024, major ports, which account for nearly 55% of port traffic, handled 819 million (81.9 crore) metric tonnes of cargo traffic, recording 7% CAGR between FY2021 and FY2024. Major ports handled 819 million metric tonnes of cargo traffic in FY2024, marking a 7% CAGR growth between FY2021 and FY2024.
The report states that the low share of infrastructure spending as a percentage of GDP (3.2%) and the high logistic expenditure (13% to 14% of the GDP) are the two major challenges for the logistics industry in India.
The logistics sector in India has evolved rapidly in the past couple of years on the back of Government policies, rapid infrastructural improvements, technological advancement in supply chain systems, growth in e-commerce, and recognition of the urgent need to build a robust integrated logistics ecosystem in the country.
India’s rank in the World Bank’s Global Logistics Performance Index improved to 38 in 2023, aiming to break into the top 25 ranks by 2030.