The Logistics Sector in India Holds Much Promise And Opportunity for Investment and Job Creation in the Coming Years

Logistics is a sector that is expected to see significant growth in India in the coming years, with massive potential for investment and job creation. 

The logistics sector in India has traditionally been fragmented and inefficient, but with the government’s focus on improving infrastructure and implementing policy reforms, there is a lot of potential for growth in this sector.

The Union Minister of State for Skill Development, Rajeev Chandrasekhar, has also echoed the same while speaking at a conference on “Transforming Logistics for Coastal Economies” ahead of the third G20 Education Working Group meeting scheduled to be held from April 27 to 29 in Bhubaneshwar.

The post-pandemic world has had its challenges, and one of the major challenges that global firms faced were in regards to China, overtly dependent on the nation when it came to supply chain and heavily affected as the pandemic still reigned in China, leading to disruptions. Another factor is the increasing feud between China and the United States; thus, the world is now looking at resilient logistics and trusted supply chains, moving away from risk and towards trusted, resilient economies.

India’s Logistic Sector Poised For Much Growth And Ample Job Opportunities: 

For many decades India has been looked at poorly as not having a viable market and the capacity to become a manufacturing hub in the eyes of global firms, as it was thought that the cost of doing business in India was not competitive. 

However, things have changed, and today global majors are manufacturing semiconductors, electronics, mobiles and many more products in India; exporting and selling in India and the underlying logistics ecosystem has become more efficient.

Thus, it is now coming up as a sector that could also absorb a chunk of youth, providing much-needed employment opportunities that are drying out in other major employers, such as the IT sector.

Here are some analysts’ views on how the logistics sector is poised to grow in the coming years in India and globally.

• According to a report by CARE Ratings, the Indian logistics sector is expected to grow at a CAGR of 10.5% between 2020 and 2025, driven by factors such as e-commerce growth, infrastructure development, and policy reforms.

• A report by Frost & Sullivan predicts that the global logistics industry will grow at a CAGR of 7.6% between 2020 and 2025, with the Asia-Pacific region accounting for a significant share of this growth. The report cites increasing demand for end-to-end supply chain visibility and the adoption of advanced technologies as key drivers of growth.

• According to a report by DHL, the global logistics industry is expected to grow by 4.3% annually between 2020 and 2025. The report identifies e-commerce, urbanization, and sustainability as key drivers of growth.

• The World Bank’s Logistics Performance Index (LPI) ranks countries based on their logistics performance, and India’s ranking has been steadily improving over the years. 

In the 2020 LPI, India ranked 44th out of 160 countries, up from 54th in 2018. This indicates that India is making progress in improving its logistics infrastructure and efficiency, which bodes well for the future growth of the sector.

On the whole, analysts are bullish on the growth prospects of the logistics sector in India and globally, with e-commerce, infrastructure development, and technology adoption being identified as key drivers of growth.

Some of the factors that are expected to drive growth in the logistics sector in India include:

• The growth of e-commerce: The e-commerce sector in India has seen explosive growth in recent years, and this is expected to continue in the coming years. This growth is driving demand for efficient logistics and supply chain solutions.

• Infrastructure development: The Indian government has launched several initiatives to improve infrastructure, including the development of dedicated freight corridors and the modernization of ports and airports. This is expected to improve the efficiency of logistics operations and reduce transportation costs.

• Policy reforms: The Indian government has introduced several policy reforms aimed at simplifying regulations and reducing bureaucracy in the logistics sector. This is expected to attract more investment and improve the ease of doing business in this sector.

Youth Can Explore This Sector

To prepare themselves for opportunities in the logistics sector, youth in India could consider pursuing education and training in fields such as logistics management, supply chain management, and transportation management. 

There are several institutes in India that offer courses in these fields, including the Indian Institute of Management (IIM) and the Indian Institute of Logistics (IIL).

In addition to formal education, youth could also consider gaining hands-on experience in the logistics sector through internships or entry-level jobs in logistics companies. This will help them gain practical knowledge and skills that will be valuable in the industry.

Finally, it is important for youth to stay up-to-date with industry trends and developments and to network with professionals in the logistics sector. 

Attending industry conferences and events, joining professional associations, and building a strong online presence can help youth build their professional network and stay informed about opportunities in the logistics sector.

In Conclusion: The logistics sector is likely to see a growth spur in the coming years. As companies in India are moving from traditional setups towards integration of IT and technology, this is expected to reduce the costs incurred and meet service demands. 

The government’s “Make in India” initiative is expected to boost the manufacturing sector to 10% growth. 

Furthermore, the booming e-commerce market is a significant growth driver spurred by policy changes and infra upgrades; the logistics industry is expected to grow at 10-12% CAGR in the near term, improving India’s competitiveness. 

With a pick-up in demand, the logistics market, pegged at ~$250 bn, is expected to grow at 10- 12% CAGR to $380 bn by FY25.