Several factors are helping the growth of logistics industry in India over the decade that includes changing tax system, rapid growth in industries such as automobile, pharmaceuticals, FMCG and retail. However, major sectors that are investing huge amounts in logistics industry are aviation, metal & mining and consumer durables.
Deepak Baid, Director, Siddhi Vinayak Logistic Pvt. Ltd says that with increasing competition and cost, focus on outsourcing, entry of foreign players is having positive impact on the industry. Three major contributors for the growth of the logistic industry are: emergence of organized retail, increase in foreign trade and India becoming soon the manufacturing hub.
Infrastructure is one of the biggest challenges faced by the Indian logistics sector and has been a major deterrent to its growth. Less economy of scale due to high fragmentation of industry, lack of skilled labor and manpower are also one of the major challenges for the logistic sector.
Baid says real growth will occur in India from rural areas and remote locations. For companies to win over the Indian market which is huge, they need to have right end-to-end supply chain strategies in place, covering network strategy, proper human resources, and infrastructure.