Knowledge Based Guidance for Sustainable Growth...

Warehousing & Logistics

The Indian Logistics Industry was estimated at US$ 125 billion in 2013, but given the highly unorganised nature of the industry, with organised sector comprising only 6% of the industry, the actual estimation is expected to be quite above the amount mentioned. The industry generated employment for 45 million people and is expected to grow annually at the rate of 15- 20 per cent, with sub-sectors sometimes growing even at 30-40% per annum, reaching revenues of approximately $ 385bn by 2015.

Several factors helped 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. 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 the global manufacturing hub. More importantly government initiatives have also opened a world of opportunities in this sector, with 100% FDI under the automatic route being permitted for all logistic services.

Recently, warehouses have become key growth drivers in the logistics industry. Apart from conventional storing services, warehouses now providing value-added services like consolidation and breaking up of cargo, packaging, labelling, bar coding and reverse logistics etc. warehousing and related activities account for approx. 20% of the total logistics industry.

Most of the warehousing space in India lies with unorganised players in domestic front, which is causing wide supply and demand gap in storage space. Currently, the organised warehousing industry in India has a capacity of approx. 80million metric tonnes and is growing at 35 to 40 per cent per annum.

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