Logistic Sector

  • India’s logistics sector is highly defragmented and very complex with more than 20 government agencies, 40 partnering government agencies (PGAs), 37  export promotion councils, 500 certifications, 10000 commodities being stakeholders in it.
  • At present it has 160 billion market size and involves 12 million employment base, 200 shipping agencies, 36 logistic services, 50 IT ecosystems and banks and insurance agencies.
  • Government is aiming is to reduce logistics cost from present 14% of GDP to less than 10% by 2022.
  • As per Economic Survey 2017-18, Indian logistics sector provides livelihood to more than 22 million people.
  • Improving this sector will facilitate 10% decrease in indirect logistics cost leading to growth of 5 to 8% in exports.
  • Further, it estimates that worth of Indian logistics market will be around US $215 billion in next two years compared to about US $160 billion currently.
Need for integrated Logistics sector development:
  • The logistics cost in India is very high compared to developed countries.
  • High cost reduces competitiveness of Indian goods both in domestic as well as export market.
  • Increasing globalization of Indian economy, along with renewed manufacturing vigour attributed to Make in India Campaign and growth of e-commerce business all forecast rapid growth in Indian logistics sector.
  • India was ranked 44 in World Bank Logistics Performance Index 2018.
  • This sector provides employment to more than 22 million people and is expected to grow at rate of 10.5% over the next 5 years.
  • Logistics is also backbone of India’s international trade and will help in diversification of not only India’s export basket but also of products and countries.

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