LOGISTICS SECTOR-

THE BIG PICTURE

RAKESH MEHROTRA
M.D/CONCOR
 STATE OF INDIAN
ECONOMY
INDIAN ECONOMY POISED FOR BIG LEAP FORWARD.
GDP GROWTH 8.9 % ( APR-JUN ‘’06) & 9.2 % ( JUL-SEPT ’06 ).
MANUFACTURING SECTOR GROWING AT 12 %.
DOUBLE DIGIT GROWTH IN GDP POSSIBLE.
SERVICES SECTOR CONRIBUTES MORE THAN 50 % OF GDP.
TRADE AND COMMERCE GROWTH AT 14 % .
MASSIVE INVESTMENTS IN INFRASTRUCTURE PROJECTS.
EXPORT-IMPORT TRADE GROWTH –EXPORTS-37.3 % AND
IMPORTS-32.1 %
BUOYANT CAPITAL MARKETS.

INDIA IS BOOMING
 LOGISTICS INDUSTRY
SOME FACTS
DOMINATED BY UNORGANISED PLAYERS WITH LITTLE OR
NO VALUE ADDITION.
HIGH LOGISTICS COSTS- 13 % AGAINST A GLOBAL
AVERAGE OF 8~10 %. TRANSPORTATION COSTS ARE A MAJOR
FACTOR.
LOW INVESTMENTS IN TECHNOLOGY- WAREHOUSING
PRACTICES /TRACK & TRACE SYSTEMS.
INDIAN LOGISTCS SECTOR AT THE LOWER END OF
EVOLUTION STAGE.
CHARECTERISED BY POOR FACILITIES AND
INFRASTRUCTURE, LOW IT ENABLEMENT , LIMITED
INDUSTRY PARTNERS WITH NO INTEGRATION.
MULTI TIER TAX STRUCTURE- 3PL SERVICES OFFER
LIMITED BENEFITS TO THE USER.
 GROWTH DRIVERS

STRONG GDP GROWTH.

MASSIVE INVESTMENTS IN INFRASTRUCTURE.
INDIA EMERGING AS PREFERRED OUTSOURCING
LOCATION FOR MANUFACTURING ACTIVITIES.
DOMESTIC RETAIL EXPANSION- ORGANISED RETAILING
POISED FOR A BOOM.
AGRI BUSINESS COMING INTO SHARP FOCUS.
IMPLEMENTATION OF VAT AND PLANNED PHASING OUT OF
CST.
 GROWTH INHIBITORS

HIGHLY FRAGMENTED MARKETS.

INFRASTRUCTURAL DEFICIENCIES AND INEFFICIENCIES AT
LEAST IN THE SHORT TERM.
LARGE NUMBER OF PLAYERS/ INTERMEDIARIES IN THE
TOTAL SUPPLY CHAIN.
LOW LEVEL OF INVESTMENTS IN APPROPRIATE
TECHNOLOGIES.
LACK OF POLICY REFORMS TO ENCOURAGE INVESTMENTS
IN LOGISTICS SECTOR.
 THE FUTURE
-GAZING THE CRYSTAL BALL
WITH INDIA EMERGING AS A GLOBAL MANUFACTURING
HUB, STRONG GROWTH OF INFRASTRUCTURE COUPLED
WITH RETAILING BOOM, THE LOGISTICS SECTOR IN INDIA IS
AT AN INFLEXION POINT.
POISED TO BECOME THE FASTEST GROWING SECTOR OF
INDIAN ECONOMY.
WILL BE ABLE TO PROVIDE EFFICIENT LOGISTICS
SOLUTIONS MATCHING GLOBAL STANDARDS OF QUALITY
AND COSTS. ROLE OF LOGISTICS WILL NOT BE LIMITED TO
“MOVING THINGS” ALONE BUT WILL ADD VALUE TO TOTAL
SUPPLY CHAIN.

A CAGR OF 20 ~ 25 % POSSIBLE OVER NEXT

THREE TO FIVE YEARS.