Logistics sector has always been the backbone of a nation’s economy, facilitating the smooth movement of goods and services across the country. For a country like India, which is aspiring to become a reliable supply chain partner for the global economies, having a robust logistics and supply chain network is crucial.
India, which celebrates National Logistics Day on June 28, has made several strides in the logistics space in recent years, thanks to various initiatives announced by the Prime Minister Narendra Modi-led government as well as the rapid growth in technology and automation. These advancements have aided in pushing India to the 38th position on the Logistics Performance Index for 2023 by the World Bank.
“The logistics industry in India has reached unprecedented heights, establishing itself as a major force for the country’s economic growth. With a vast consumer base, the rapid growth of e-commerce, and a steadfast government focus on infrastructure development, logistics has become a pivotal force driving trade facilitation and optimizing supply chains. This dynamic landscape provides unlimited opportunities for logistics companies to expand, innovate and offer seamless services across the country,” Raaja Kanwar, Chairman and Managing Director, Apollo International and Apollo Supply Chain, said.
One of the significant milestones in India’s logistics sector is the Sagarmala project. Launched in 2015, this ambitious initiative aims to leverage the country’s vast coastline and waterways to drive port-led development.
To further streamline logistics operations, the government unveiled the National Logistics Policy in 2018. This comprehensive policy framework aims to create an integrated logistics ecosystem by improving infrastructure, reducing logistics costs, and promoting digitalisation.
One of the key initiatives under the National Logistics Policy is the Unified Logistics Interface Platform (ULIP). A digital platform that integrates various stakeholders, including government entities, logistics service providers, and traders, onto a single interface, ULIP enables seamless information exchange, simplifies documentation processes, and improves transparency and efficiency in logistics operations.
“Post the announcement of the policy, India’s logistics infrastructure has shown steady growth. With the objective of a one-stop solution for national logistics, four key actions of NLP, IDS, ULIP, ELOG, and Group for System Improvement were introduced with the integration of the latest technology. By embracing the transformative power of logistics and technology, we can forge a future where logistics becomes the cornerstone of economic progress, fostering global connections and leaving an enduring legacy for future generations,” Zaiba Sarang, Co-founder, iThink Logistics, said.
On the technology front, the logistics and supply chain industry has witnessed a wide usage of various technologies such as Artificial Intelligence, Machine Learning, IoT, etc., for demand and supply forecasting and planning as well as for route planning, route optimisation as well as tracking.
According to World Bank’s LPI, a significant reduction in dwell time at ports largely due to the improved investments in infrastructure and technology, have pushed India to the 38th place from 44th position in 2018.
“As India strides toward becoming a global logistics hub, with robust infrastructure initiatives including dedicated freight corridors, logistics parks, and world-class ports, the sector is embracing advanced technologies such as IoT, AI, and blockchain. These transformative technologies enable real-time tracking, supply chain visibility, and predictive analytics, revolutionizing the logistics landscape and driving enhanced efficiency and effectiveness,” Kanwar added.
“As India drives ahead in becoming a USD 5 trillion economy, the Indian logistics sector is at the forefront of various drivers enabling these aspirations. With stable market dynamics and nurturing policy framework that facilitates phygital infra development, today, logistics in India is at an inflexion point. Innovations in digitalisation, inflow of private investments and focus on environmental & social sustainability are strengthening our foundations,” a TCI spokesperson said.
Expressing his views, Sandeep Bansal, Chief Business Officer, Falcon Autotech, said, “With the Indian warehouse automation market projected to reach USD 682.1 million in the next five years, experiencing an impressive CAGR of 26.1 per cent, as per the Mordor Intelligence 2023 report, we stand witness to the transformative impact of automation on our industries. We are very much aligned with the power of automation to revolutionise the logistics landscape, driving efficiency, productivity, and customer satisfaction to unprecedented heights. Warehouse automation enables companies to optimize their warehouse operations, reduce costs, and deliver faster, more accurate services.”
According to Nishith Rastogi, Founder & CEO, Locus, technological advancements with AI, ML, etc., have positively augmented the productivity in this sector, optimising routes and reducing delivery times and carbon footprints. “However, despite these advances, our recent Last-Mile Maturity Assessment report revealed that only 20 per cent of 3PL & CEP organizations in India claim to have an empowered workforce with sufficient technology for smooth communication and efficiency,” he added.
Another aspect that has enabled the growth of India’s logistics industry is the government’s efforts to forge partnerships with other economies to boost bilateral trade and strengthen logistics ties.
Initiatives like the India-ASEAN (Association of Southeast Asian Nations) corridor and the Chabahar Port development project have enhanced connectivity, reduced transit time, and opened new avenues for trade. These collaborations not only facilitate economic growth but also foster regional integration and cooperation.
Besides, the implementation of the Goods and Services Tax (GST) has streamlined the tax structure, reducing complexities and improving the efficiency of logistics operations. Additionally, initiatives such as the electronic waybill system and the direct port delivery scheme have further expedited cargo movement, minimising transit times and costs.
To ensure sustainable logistics practices, the industry has taken significant strides towards reducing carbon emissions. Initiatives such as adopting alternative fuels, implementing energy-efficient technologies, and promoting eco-friendly packaging have been embraced by various stakeholders.
Additionally, the promotion of multimodal transportation, which combines road, rail, air, and waterways, reduces congestion, minimises carbon footprint, and enhances overall sustainability.
While progress has been commendable, the focus on reducing logistics costs remains a priority. High logistics costs continues to pose challenges to competitiveness and hinder economic growth. As major global economies look at India as an alternative to China or a China+1 option, it is pertinent that steps are taken in the right direction to reduce costs and improve efficiencies.
