The logistics sector in India for the year 2020 and the key areas that will drive significant growth.
Logistics is one such sector which has seen constant evolution over the past few years and is on a fast-paced growth in recent times. There is an upward trend in the global market and the same can also be said about the Indian Logistics Sector.
It won’t be wrong to say that the Indian logistics sector and the Logistics company in India is competing with many global logistics players of the most affluent countries. There is a great potential for improvements in many areas of logistics in India and hence this is the best time to understand the specific domains where one can invest time, money and efforts to achieve maximum growth.
Current scenario :
The growth rate of the Indian Logistics sector today is interconnected to every industry and has got integrated with technology and newer service providers. According to the latest world logistics index rankings based on the global logistics performance index, India has moved to the 35th rank from the 54th in the year 2014.
It is imperative to say that the Indian Logistics industry is the backbone of our economy and has shown massive improvement over the years. The Indian logistics industry in the year 2019 has been considered as the most promising and a year that has seen the quickest growth rates.
Based on official statistics the growth rate in 2019 can be largely attributed to the increasing number of e-commerce providers. It can be undoubtedly said that people have already started relying hugely on e-commerce for almost all their requirements and the same is said to continue in 2020 as well.
If we have to go by numbers, in the year 2019 the Indian logistics industry was valued at $160 Billion and with the present growth rates it is expected to be roughly around $250 Billion in the present year.
E-commerce has also attracted many FMCG and multinational companies into this space and has started creating many opportunities for the logistics industry to grow. Some of the areas which have had a direct impact are the inventory management and warehousing solutions of the retail industry. It has forced the retailers to find efficient warehousing solutions that facilitate better storage and also more responsive means of deliveries.
No wonder the Indian logistics industry which provides employment to more than 22 million people has shown a CAGR of 7.8 percent over the past five years and is expected to surge to 40 million by the end of 2020.
This is also because many companies are relying on the Indian logistics industry to help them better serve the ever-growing customized demands of Indian consumers. This is a very promising aspect of the current economy and in a way creates more jobs in the logistics sector.
Let us check out some of the key areas that will bring in substantial changes and development for logistics growth in 2020 :
Technology to be the backbone of Logistics :
Technology is going to be the driving force for many industries that will put businesses on a growth path and that too at faster paces. Technology in the industry has already started providing huge progress in the operational as well as various systems. Hence it won’t be wrong to say that technology is going to be the backbone of the economy that will be a primary tool in making it stronger and reliable.
Though adopting technology might be expensive but in the long run, it is going to give you more integrated, swift and error-free logistics operations. Technology such as AI, BlockChain, Machine Learning, and IoT are going to be implemented not just as a collection of fancy gadgets but as a means and methods to build a more robust foundation logistics in India.
Assurance of Indian Government for better infrastructural developments :
There has been a constant assurance from the Indian government about implementing more modernized and improved functional infrastructural development projects in Logistics. It has also assured that innovative measures will be introduced to help tap rural sectors as well. Projects as such will not only bring in more efficiency in the supply chain but also improve connectivity issues faced by geographically dispersed areas in the country.
Companies will be able to reach more untapped rural terrains and get a much wider customer base to serve in particular for the e-commerce sector. This, in turn, will be a huge opportunity for the Indian Logistics Industry.
Newer Policies & Regulations :
There are a lot of promising policy changes and reformations that are being planned and introduced by the government. The Goods and Service Tax (GST) was one such policy that has changed the face of the way the Indian logistics works. Along with this is the granting of the infra status and relaxing of the FDI policies that will also play a major role in 2020 that will give a huge boost to the Indian Logistics industry.
One of the major advantages the GST has brought in is that industrial centers can also act as distribution and aggregation hubs and that in effect has reduced the need to run several warehouses. This has considerably also brought down huge operational expenses in the storage department. With the growth of E-commerce and many FMCG now making their products available online easier transportation directly from the manufacturing units to the warehouses, wholesale as well as retail markets have been made possible.
FINAL THOUGHTS :
The Indian Logistics industry has undergone a serious transformation and is now classified as an end to end solution provider that has integrated multiple sectors. The year 2020 seems to be very promising with many key areas that are going to contribute to the substantial improvements both in operational efficiencies as well as overall growth. There is no doubt that the Indian Logistic Industry is going to be the most dominant force in the overall economic growth of the country.