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India Logistics Market By Model Type (2 PL, 3 PL, 4 PL); By Transportation Mode (Roadways, Seaways, Railways, Airways); By End Use (Manufacturing, Consumer Goods, Retail, Food and Beverages, IT Hardware, Healthcare, Chemicals, Construction, Automotive, Telecom, Oil and Gas, Others); By Region – Growth, Share, Opportunities & Competitive Analysis, 2024 – 2032

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Published: | Report ID: 39458 | Report Format : PDF
REPORT ATTRIBUTE DETAILS
Historical Period  2019-2022
Base Year  2023
Forecast Period  2024-2032
India Logistics Market Size 2023  USD 24,275.8 Million
India Logistics Market, CAGR  12.44%
India Logistics Market Size 2032  USD 62,021.2 Million

Market Overview

The India Logistics Market is projected to grow from USD 24,275.8 million in 2023 to an estimated USD 62,021.2 million by 2032, with a compound annual growth rate (CAGR) of 12.44% from 2024 to 2032. This robust growth underscores the increasing efficiency and expansion of the logistics sector in India, driven by significant improvements in infrastructure, technological integration, and service quality. As the backbone of trade and commerce, logistics plays a crucial role in supporting India’s economic expansion, with growing investments and developments enhancing the market’s size and scope over the forecast period.

Market drivers for the India Logistics Market include the rapid growth of e-commerce, government reforms like the Make in India initiative, and improvements in infrastructure, such as the development of dedicated freight corridors and logistics parks. Additionally, technological advancements such as the use of AI, IoT, and blockchain are streamlining operations and increasing the reliability and efficiency of logistic services. Trends towards sustainability and the adoption of green logistics practices are also influencing market dynamics, pushing companies to innovate and adopt environmentally friendly processes.

Geographically, the market is witnessing significant growth in metropolitan regions such as Mumbai, Delhi-NCR, and Bangalore due to their strategic locations and advanced infrastructure. These areas serve as major hubs for both international and domestic freight forwarding, benefiting from enhanced connectivity and proximity to major consumer markets. Key players in the India Logistics Market include Blue Dart Express Ltd., DHL Express India Pvt Ltd., and Allcargo Logistics Ltd. These leaders are focusing on expanding their service offerings and enhancing their network capabilities across the country to leverage the growing demand for efficient logistic solutions.

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Market Drivers

Government Initiatives and Policy Reforms:

The Government of India has implemented several initiatives that significantly boost the logistics sector. Key among them is the Goods and Services Tax (GST), which has simplified the tax structure and reduced the cargo movement clearance times at state checkpoints. For instance, since the implementation of the Goods and Services Tax (GST), cargo movement clearance times at state checkpoints have been reduced by approximately 30%, thereby accelerating the transportation process. Additionally, initiatives like the Sagarmala Project, which aims to enhance the performance of the country’s logistics sector through port modernization and new port development, and the Bharatmala Project, which focuses on improving road connectivity across the country, are pivotal. Such reforms facilitate smoother and faster transportation routes, leading to decreased logistics costs and improved service delivery.

Technological Advancements and Digitalization:

The integration of technology in logistics operations has revolutionized the way services are offered in India. A recent survey showed that 70% of logistics operations in India have integrated technologies such as Artificial Intelligence (AI), the Internet of Things (IoT), and blockchain to streamline operations, enhance real-time tracking and visibility, and improve the accuracy of inventory management. Digital platforms are enabling seamless communication and data exchange across the supply chain, which not only increases the reliability of logistic services but also optimizes resource management and operational efficiency.

Expansion of E-commerce:

The exponential growth of the e-commerce industry in India is a substantial driver for the logistics market. For example, this exponential growth of the e-commerce industry in India has led to a 50% increase in demand for logistic services that can provide swift and efficient delivery solutions. As online shopping becomes more prevalent, there is a rising demand for logistic services that can provide swift and efficient delivery solutions. This surge in demand has led companies to innovate in last-mile delivery operations, adopt more customer-centric approaches, and enhance logistical flexibility to handle the increase in volumes, especially during peak shopping seasons. Furthermore, the e-commerce boom encourages logistics companies to invest in advanced warehousing and distribution technologies to meet the fast-paced delivery expectations of consumers.

Infrastructure Development:

Continued investment in infrastructure development remains a critical driver for the India Logistics Market. Upgrading and expanding the road network, developing dedicated freight corridors, and enhancing port infrastructure are central to improving the overall logistical framework. Such developments reduce transportation lead times and costs, improve connectivity between urban and rural areas, and increase the efficiency of moving goods across the country. Moreover, the focus on developing cold chain logistics infrastructure, crucial for sectors like pharmaceuticals and perishable goods, ensures that India can meet the increasing demands of a diverse range of industries requiring specialized logistic solutions.

Market Trends

Increased Use of Automation and Robotics:

Automation is becoming increasingly prevalent in the logistics sector in India. For instance, a recent survey showed that approximately 60% of warehouses and distribution centers in India are employing robotics for sorting, packing, and handling materials.This not anywhere reduces the dependency on manual labor but also increases precision, reduces error rates, and enhances overall efficiency, particularly in repetitive and high-volume tasks.

Growth of Cold Chain Logistics:

As India’s pharmaceutical and food sectors expand, there is a growing demand for cold chain logistics to ensure the safe transport and storage of perishable goods and medical products. This trend is supported by technological advancements in refrigeration and tracking technologies that ensure compliance with health and safety standards and reduce spoilage during transit.

Adoption of Green Logistics Practices:

Sustainability is becoming a key consideration in the logistics industry. For instance, a recent report indicated that 50% of logistics companies in India are adopting green logistics practices, such as using electric vehicles, optimizing route planning to reduce fuel consumption, and investing in energy-efficient warehouses.These initiatives not only help in reducing the environmental impact but also align with global standards and consumer preferences for sustainability.

Integration of Advanced Technologies:

The use of advanced technologies like IoT, AI, and big data analytics is on the rise. For example, the use of advanced technologies has seen an increase of 40% in the last year. These technologies enable real-time tracking of goods, predictive maintenance of logistics infrastructure, and data-driven decision-making. The integration of such technologies enhances transparency, reliability, and efficiency in logistics operations.

Expansion of Last-Mile Delivery Solutions:

Last-mile delivery continues to be a focus area due to the e-commerce boom. Logistics providers are experimenting with various delivery models, including the use of drones and autonomous vehicles, to ensure timely and cost-effective delivery services, especially in urban areas.

Focus on Logistics Aggregators:

The rise of logistics aggregators that offer end-to-end solutions through a single platform is a notable trend. These platforms provide services ranging from transportation to warehousing by integrating various logistics providers, thus offering greater flexibility and optimized cost solutions for businesses.

Enhanced Focus on Supply Chain Resilience:

 In response to disruptions caused by global events like the COVID-19 pandemic, there is an increased focus on building resilient supply chains. Companies are diversifying their supplier base, increasing inventory levels, and investing in robust logistics planning and risk management strategies to mitigate future disruptions.

Market Restraints and Challenges

Infrastructure Deficiencies:

While there have been improvements, India’s logistics infrastructure still lags behind global standards. Inadequate road networks, congested ports, and limited warehousing facilities pose significant challenges. Poor infrastructure leads to higher transportation costs, delays, and inefficiencies, making it difficult for logistics providers to meet the growing demands of various sectors.

Regulatory Hurdles:

The logistics sector in India is burdened by complex regulatory frameworks and bureaucratic red tape. Multiple regulations across different states create inconsistencies and increase compliance costs for logistics companies. Additionally, frequent changes in policies and lack of a unified regulatory framework further complicate operations and planning.

High Logistics Costs:

 Logistics costs in India are among the highest in the world, accounting for about 14% of the GDP compared to the global average of 8-9%. High fuel prices, tolls, and inefficiencies in transportation and warehousing contribute to these elevated costs. These factors not only reduce the competitiveness of Indian goods in the global market but also strain the profitability of logistics companies.

Skilled Labor Shortage:

 There is a notable shortage of skilled labor in the logistics sector, particularly in areas requiring technical expertise such as supply chain management, warehouse automation, and advanced transportation technologies. This shortage limits the ability of logistics providers to fully leverage technological advancements and improve operational efficiency.

Fragmented Market Structure:

The Indian logistics market is highly fragmented with numerous small and medium-sized enterprises (SMEs) operating independently. This fragmentation leads to a lack of standardization and coordination, resulting in inefficiencies and higher costs. Consolidation within the industry is necessary to achieve economies of scale and improve service delivery.

Technological Gaps:

While there is a trend towards digitalization, many logistics providers still rely on outdated technologies and manual processes. The slow adoption of advanced technologies such as IoT, AI, and blockchain hinders the optimization of logistics operations and reduces competitiveness.

Security Concerns:

The logistics sector faces significant security challenges, including theft, pilferage, and damage to goods in transit. These issues not only result in financial losses but also damage the reputation of logistics providers. Implementing robust security measures and tracking systems is essential to mitigate these risks.

Environmental Concerns:

Increasing environmental regulations and the push towards sustainability pose a challenge for logistics providers. While green logistics practices are gaining traction, they require substantial investments in eco-friendly technologies and infrastructure, which can be a financial burden for many companies.

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Market Segmentation Analysis

By Model Type

The India Logistics Market encompasses various segments, including 2PL, 3PL, and 4PL. Second Party Logistics (2PL) involves traditional logistics services like transportation and warehousing provided directly by service providers, and is characterized by a high degree of fragmentation with many small and medium-sized enterprises. Third Party Logistics (3PL) providers offer integrated solutions, combining transportation, warehousing, and value-added services such as packaging and inventory management, and this segment is experiencing rapid growth due to businesses increasingly outsourcing logistics to focus on core activities. Fourth Party Logistics (4PL) providers serve as consultants overseeing the entire supply chain process, integrating multiple 3PL services to deliver comprehensive solutions, and this segment is gaining popularity among large corporations seeking enhanced supply chain optimization.

By Transportation Mode

Roadways dominate the India Logistics Market as the most utilized mode of transportation, driven by an extensive road network and the flexibility of door-to-door delivery services, accounting for the majority of domestic cargo movement. Seaways play a crucial role in international trade, handling bulk commodities and containerized cargo through major ports and coastal shipping routes that facilitate exports and imports. Railways are essential for transporting heavy and bulk goods over long distances, benefiting from dedicated freight corridors and infrastructure investments aimed at improving efficiency and connectivity. Airways cater to high-value, time-sensitive goods such as pharmaceuticals, electronics, and perishables, offering the fastest delivery times despite higher costs, making them vital for certain industries.

By End Use

The India Logistics Market caters to a diverse range of sectors, each with unique logistics needs. Manufacturing relies heavily on logistics for the transportation of raw materials and finished goods, ensuring production schedules and supply chain continuity. The rise of e-commerce in the consumer goods segment has amplified the demand for last-mile delivery and inventory management. Retail logistics require a robust network to handle diverse products and frequent deliveries. Food and beverages necessitate specialized solutions, including cold chain logistics, to maintain the quality of perishable items. IT hardware demands timely and secure delivery of high-value electronics, while healthcare logistics focus on the precise distribution of medical supplies and pharmaceuticals. The chemicals sector requires specialized logistics for hazardous materials, while construction logistics involve transporting heavy and oversized materials. The automotive industry depends on a streamlined network for timely delivery of parts and vehicles. Telecom logistics support the distribution of essential equipment for network infrastructure, and the oil and gas sector needs robust logistics for transporting large volumes of crude oil and equipment. Other sectors like textiles, agriculture, and mining also contribute to the varied logistics demands across the country.

Segments

Based on Model Type

  • 2 PL (Second Party Logistics)
  • 3 PL (Third Party Logistics)
  • 4 PL (Fourth Party Logistics)

Based on Transportation Mode

  • Roadways
  • Seaways
  • Railways
  • Airways

Based on End Use

  • Manufacturing
  • Consumer Goods
  • Retail
  • Food and Beverages
  • IT Hardware
  • Healthcare
  • Chemicals
  • Construction
  • Automotive
  • Telecom
  • Oil and Gas
  • Others

Based on Region

  • North India
  • South India
  • West India
  • East India

Regional Analysis

North India (30%):

North India holds a significant share of the logistics market, accounting for approximately 30% of the total market. The region benefits from its strategic location, serving as a crucial transit point for goods moving between the northern states and other parts of the country. Major cities like Delhi-NCR, Chandigarh, and Jaipur are key logistics hubs, supported by well-developed road and rail networks. The presence of several industrial corridors, such as the Delhi-Mumbai Industrial Corridor (DMIC), further enhances the logistics infrastructure in this region. Additionally, North India’s proximity to international borders facilitates cross-border trade with neighboring countries.

South India (25%):

South India represents around 25% of the India Logistics Market. The region is known for its robust port infrastructure, with major ports like Chennai, Cochin, and Visakhapatnam playing pivotal roles in international trade. South India is also a significant IT hub, with cities like Bangalore, Hyderabad, and Chennai driving substantial demand for logistics services to support the tech industry. The region’s emphasis on manufacturing, particularly in the automotive and electronics sectors, further contributes to its logistics market share. The development of logistics parks and investment in road and rail connectivity are enhancing the efficiency of logistics operations in South India.

West India (35%):

West India commands the largest share of the logistics market, approximately 35%. This dominance is largely due to the presence of Mumbai, the financial capital of India, which is a major hub for both domestic and international trade. The region’s extensive port infrastructure, including the Jawaharlal Nehru Port Trust (JNPT) and the Mumbai Port, facilitates significant cargo movement. Gujarat’s industrial zones, such as those in Ahmedabad and Vadodara, also contribute to the region’s strong logistics network. The Western Dedicated Freight Corridor (WDFC) is a critical infrastructure project that is expected to further boost the logistics capabilities of this region.

East India (10%):

East India, although currently accounting for about 10% of the total market, is experiencing rapid growth due to increased government focus on infrastructure development. The region’s key logistics hubs include Kolkata, which is a major port city, and emerging industrial centers in states like Odisha and Jharkhand. The government’s efforts to improve connectivity through projects like the East-West Corridor and the development of inland waterways are expected to enhance the logistics network in East India. The region’s strategic location, serving as a gateway to the northeastern states and neighboring countries like Bangladesh, also positions it for future growth.

Key players

  • Blue Dart Express Ltd.
  • DHL Express India Pvt Ltd.
  • Allcargo Logistics Ltd.
  • Gati Ltd.
  • Transport Corporation of India Ltd. (TCI)
  • Mahindra Logistics Ltd.
  • FedEx Express TSCS (India) Pvt Ltd.
  • Safexpress Pvt Ltd.
  • DTDC Express Ltd.
  • TVS Supply Chain Solutions Ltd.

Competitive Analysis

The India Logistics Market is characterized by intense competition among established players and emerging companies. Blue Dart Express Ltd. and DHL Express India Pvt Ltd. are prominent for their extensive domestic and international network capabilities. Allcargo Logistics Ltd. and Gati Ltd. excel in multi-modal logistics solutions, offering a competitive edge in freight forwarding and supply chain management. Transport Corporation of India Ltd. (TCI) and Mahindra Logistics Ltd. are known for their comprehensive end-to-end logistics services across various sectors. FedEx Express TSCS (India) Pvt Ltd. leverages its global reach to provide efficient express delivery services. Safexpress Pvt Ltd. and DTDC Express Ltd. focus on expanding their reach in e-commerce logistics, while TVS Supply Chain Solutions Ltd. offers innovative solutions in supply chain management, making the market dynamic and highly competitive.

Recent Developments

In January 2024, DHL Express commenced operations for its final Boeing 777 freighter at the South Asia Hub in Singapore. With a payload capacity of 102 tons, this aircraft joins four other Boeing 777 freighters already based in Singapore. These additions enhance intercontinental connectivity between the Asia Pacific and the Americas. Sporting a dual DHL-Singapore Airlines (SIA) livery, these five freighters provide a combined payload capacity of 1,224 tons, catering to the growing demand for international express shipping services.

In January 2024, Kuehne + Nagel announced the introduction of its Book & Claim insetting solution for electric vehicles, enhancing its decarbonization initiatives. This development reflects Kuehne + Nagel’s strategic priority to create sustainable road freight solutions. Customers using Kuehne + Nagel’s road transport services can now claim carbon reductions achieved through the use of electric trucks, even when physical movement of goods on these vehicles is not feasible, thereby promoting sustainability and reducing carbon footprints.

In November 2023, DHL Express inaugurated its expanded Central Asia Hub (CAH) in Hong Kong, addressing the rapid growth in global trade. The total investment in this state-of-the-art hub amounts to EUR 562 million, marking the largest infrastructure investment by DHL Express in the Asia Pacific region. The Central Asia Hub, one of three global hubs for DHL Express, enhances connectivity between Asia Pacific and the rest of the world, while also supporting intra-Asia trade. This expansion underscores DHL’s commitment to boosting global and regional logistics capabilities.

Market Concentration and Characteristics 

The India Logistics Market is characterized by a moderate level of concentration, with a mix of well-established players and numerous small and medium-sized enterprises (SMEs) operating across various segments. Major companies like Blue Dart Express Ltd., DHL Express India Pvt Ltd., and Allcargo Logistics Ltd. dominate significant market shares, leveraging extensive networks, advanced technology, and comprehensive service offerings. However, the market remains fragmented due to the presence of numerous regional and local logistics providers catering to niche markets and specific industries. This diverse landscape fosters competitive pricing, service innovation, and a focus on enhancing efficiency to meet the growing demands of India’s rapidly evolving economy.

Report Coverage

The research report offers an in-depth analysis based on Model Type, Transportation Mode, End User and Region. It details leading market players, providing an overview of their business, product offerings, investments, revenue streams, and key applications. Additionally, the report includes insights into the competitive environment, SWOT analysis, current market trends, as well as the primary drivers and constraints. Furthermore, it discusses various factors that have driven market expansion in recent years. The report also explores market dynamics, regulatory scenarios, and technological advancements that are shaping the industry. It assesses the impact of external factors and global economic changes on market growth. Lastly, it provides strategic recommendations for new entrants and established companies to navigate the complexities of the market.

Future Outlook

  1. The Indian government’s ongoing investment in infrastructure, including dedicated freight corridors and improved port facilities, will significantly enhance logistics efficiency and connectivity across the country.
  2. The exponential rise in e-commerce is expected to drive demand for more sophisticated last-mile delivery solutions, leading to innovations in logistics and distribution strategies.
  3. Increasing use of AI, IoT, and blockchain in logistics operations will improve real-time tracking, predictive maintenance, and overall supply chain transparency and efficiency.
  4. The growing demand for pharmaceuticals, perishable foods, and temperature-sensitive goods will boost the development of advanced cold chain logistics infrastructure, ensuring better quality and safety standards.
  5. There will be a significant push towards green logistics, with companies adopting electric vehicles, optimizing routes for fuel efficiency, and investing in renewable energy sources for their operations.
  6. Businesses will increasingly outsource logistics to third-party (3PL) and fourth-party logistics (4PL) providers to streamline operations, reduce costs, and focus on core competencies.
  7. Logistics providers will expand their networks to rural and Tier-2 cities, driven by rising consumption patterns and the need to tap into underserved markets.
  8. With growing concerns over cargo theft and damage, logistics companies will invest in advanced security technologies and practices to safeguard goods in transit and storage.
  9. Ongoing regulatory reforms, such as the implementation of GST and the development of national logistics policies, will create a more unified and efficient logistics environment, reducing bureaucratic hurdles and costs.
  10. A surge in logistics-focused startups will introduce innovative solutions and competitive dynamics to the market, fostering a culture of continuous improvement and adaptation to new technologies and business models.

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Frequently Asked Questions:

What is the projected growth rate of the India Logistics Market?

The India Logistics Market is expected to grow at a compound annual growth rate (CAGR) of 12.44% from 2024 to 2032, reaching USD 62,021.2 million by 2032.

What are the key drivers of growth in the India Logistics Market?

Key drivers include the rapid growth of e-commerce, government initiatives like the Make in India program, and advancements in infrastructure and technology, such as AI and IoT.

How is the geographical distribution of the logistics market in India?

West India holds the largest share at 35%, followed by North India at 30%, South India at 25%, and East India at 10%, each benefiting from strategic locations and infrastructure developments.

What technological advancements are impacting the logistics sector in India?

Technological advancements such as AI, IoT, blockchain, and automation are enhancing real-time tracking, operational efficiency, and overall service reliability in the logistics sector.

Who are the major players in the India Logistics Market?

Prominent players include Blue Dart Express Ltd., DHL Express India Pvt Ltd., Allcargo Logistics Ltd., Gati Ltd., and Transport Corporation of India Ltd., each focusing on expanding their services and network capabilities.

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