The government has initiated several enablers for growth in the logistics space. The biggest being the grant of infrastructure status to the logistics sector. Multi-Modal Logistics Parks (MMLPs) are a key policy initiative of the Government of India to improve the country’s logistics sector by lowering overall freight costs, reducing vehicular pollution and congestion, and cutting warehousing costs. Along with its initial efforts, including the Make in India program and improvements in infrastructure, Government of India has made a number of decisions aimed at transforming the country’s logistics sector.
Broadly, Logistics include Transportation, Warehousing, Network Design, Crossdocking, and Value Adding. As per the Economic Survey 2017-18, in the last five years the logistics sector has grown at a CAGR of 7.8% and is worth about $160 billion.
Implementation of the good and services tax (GST) regime is another game changer for the industry. GST has triggered consolidation in the warehousing domain and greater demand for third party logistics; value added services and development of multi-modal logistics parks.
Increased investor interest is being witnessed across the sector, especially in the warehousing space. The segment has seen a surge in the private equity activity over the years with the participation from a wide range of foreign investors. Rising consumer demand, boom in e-commerce, and boost in manufacturing will provide growth opportunities in the domestic logistics sector.
The government has highlighted priority areas for the sector and formulated plans to develop a detailed Integrated Logistics Action Plan for the country. Mandates like Make in India will continue to push the creation of a robust logistics framework in the country. Besides, big-ticket programs such as Bharatmala Pariyojana, Sagar Mala project and UDAN scheme will provide a boost to the logistics system. The dedicated freight corridors (DFCs) and DMIC are being touted as the biggest drivers of change in the Indian logistics sector.
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We at PPIPL have recognised the significant opportunity that the logistics/warehousing sector provides to our clients. We facilitate successful joint ventures (JV) and provide project consultancy services, tax and regulatory services, transaction and implementation support. Our independent relationships with regulatory bodies and collaborations with diversified clients help us serve you better.