Express Delivery Services Final (ICRIER) - 13-2-23

EXPRESS
DELIVERY
SERVICES
SUPPORTING THE JOURNEY
TOWARDS INDIA@2047
ARPITA MUKHERJEE
ATUL SANGANERIA
RAMNEET
GOSWAMI
Express Delivery Services
ABOUT THE AUTHORS
Dr. Arpita Mukherjee is a Professor at ICRIER. She has over 25 years of experience in policy-oriented research,
working closely with the government in India and policymakers in the European Commission and its member states,
United States (US), Association of Southeast Asian Nations (ASEAN) and in East Asian countries. She has conducted
studies for international organizations, Indian industry associations, non-government organisations and companies.
Her areas of expertise include trade and investment; services; special economic zones; logistics and economic
corridors; retail and food supply chain; start-ups, entrepreneurs; e-commerce and cross-border labour mobility. She
specialises in sector and product-specific market trends, go-to market strategy, and government policies.
Dr Mukherjee has a PhD in Economics from the University of Portsmouth, UK, and prior to joining ICRIER she worked
with the UK-based think tank - Policy Studies Institute and taught at the University of Portsmouth. She has over
80 publications including national and international referred journals, books and book chapters and government
reports. Dr. Mukherjee is a member of various government committees and policy panels and is in the editorial board
of 10 journals. She has presented her work in various conferences and seminar and is in the advisory board of industry associations and non-
government organisations. She is a regular contributor to newspapers and magazines.
Mr. Atul Sanganeria is an infrastructure and logistics professional with vast experience in designing and implementing
large scale industrial infrastructure projects including industrial corridor development, multimodal logistics park
development and support in reforming institutional and regulatory bottlenecks in logistics sector, including for
promoting industrialisation and linking firms to regional and global value chains. He has rich experience of working
with central ministries and several state governments in India and other Asian countries including Maldives, Bhutan,
Sri Lanka and Bangladesh, Indonesia, Thailand and Singapore. He also works at the intersection of infrastructure,
investments and finance and is recently involved in supporting various South Asian countries in attracting regional
investments in various sectors.
He is working as an independent corridor and logistics expert with companies and multilateral agencies (including
USAID, ADB, IFC) in implementing critical initiatives pertaining to domestic and international trade facilitation,
development of logistics parks and terminals, warehouses and several IT initiatives for driving logistics efficiency.
He was part of the core team involved with the Logistics Division in the Ministry of Commerce, Government of India in supporting the
development of the National Logistics Policy. He was a part of the core team on the East Coast Economic Corridor Development including Vizag
Chennai Industrial Corridor, Chennai Kanyakumari Industrial Corridor and initial phase of Odisha and West Bengal Corridor Development. He
is also the logistics expert for the Cross-Border Infrastructure Connectivity initiative for USAID, which under the Indo-Pacific Strategy. In the
past, Atul has had stints with Global Infrastructure Hub, IFC, Singapore, PricewaterhouseCoopers Pvt. Ltd. South Asia team, Towers Watson
Global Risk Consulting, and Public Systems Group at IIM Ahmedabad. Atul has economics, finance and policy degrees from National University
of Singapore, Jawaharlal Nehru University, Delhi and St. Xaviers College, Kolkata.
Ms. Ramneet Goswami is a consultant at ICRIER, New Delhi. She has more than two decades of experience in policy-
oriented research. Her expertise areas of research are international trade in goods and services, free trade
agreements, regional trade agreements, foreign direct investments, audiovisual and logistics sector. She has worked
on various projects funded by the Indian Government, international organisations and industry associations. She has
contributed to a book, book chapters, journal articles, working papers, medica articles and research reports. She has
done post- graduation in Economics from Chaudhary Charan Singh University, Uttar Pradesh.
Express Delivery Services
Supporting the Journey towards India@2047
Arpita Mukherjee
Atul Sanganeria
Ramneet Goswami
INDIAN COUNCIL FOR

RESEARCH ON INTERNATIONAL
ECONOMIC RELATIONS (ICRIER),
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© 2023
Indian Council for Research on International Economic Relations (ICRIER).
Express Delivery Services - Supporting the Journey towards India@2047

by Arpita Mukherjee, Atul Sanganeria and Ramneet Goswami
ISBN: 9789332706071
Typeset, printed and bound by PrintShoot, Manesar, Gurugram.

www.printshoot.com
Contents
List of Tables, Figures and Boxes........................................................................................................................................VII
List of Abbreviations............................................................................................................................................................VIII
Acknowledgement......................................................................................................................................................................X
Foreword....................................................................................................................................................................................XI
Executive Summary...............................................................................................................................................................XIII
1. Introduction............................................................................................................................................................................. 1
1.1 Methodology and Data Sources
1.2 Layout of the Report
2. An Overview of Global Express Delivery Industry..................................................................5

2.1 Growth by Regions
2.2 Key Growth Drivers
2.3 Structure of the Global Express Delivery Industry and Recent Developments
2.4 Global Developments & Regulatory Reforms: Leading to Growth and
Efficiency of EDS in Different Countries/Markets
2.5 Cross-Border Liberalisation: Trade Agreements and Express Delivery Services
2.6 Conclusion
3. Express Delivery Industry in India...............................................................................................................17

3.1 Size of Indian Express Delivery Industry
3.2 Structure of Indian Express Delivery Industry
3.3 Recent Developments and Key Growth Drivers of the Indian Express Delivery Industry
4. Growth Projections of EDS Sector under Different Scenarios............................................................................25

4.1 Indian Economy’s Vision of Becoming a USD17-Trillion Economy – Some Key Growth Drivers
4.2 Express Industry Growth Projections
4.3 Express Industry Growth Projections: B2B and B2C - Scenario Analysis
VI EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047
5. Barriers Faced by Express/Courier Companies in India.......................................................................33

5.1 Regulatory Barriers: Issues Related to Courier Imports
and Exports (Electronics Clearance) Regulation, 2010
5.2 Central GST Related Barriers
5.3 Infrastructure Related Barriers
5.4 City/Municipal Level Issues
5.5 Skill Related Barriers
5.6 Technology Related Barriers
5.7 Lack of Level Playing Field with General Cargo
6. The Way Forward – A Journey towards Amrit Kaal – India @ 2047.....................................................43

6.1 Give Express Delivery a Level Playing Field with General Cargo
6.2 Fast-track Trade Facilitation Related Reforms
6.3 Implement Voluntary Disclosure to provide Operational Certainty and Stability
6.4 GST Should be More User Friendly in a Single Market
6.5 Transport Infrastructure Gaps Should be Addressed
6.6 Focus on Skill Development and Training
6.7 Implement Technology for Clearances and Data Collection
6.8 Make E-commerce a Driver of Future Growth
6.9 Ensure Liberalisation Commitments under Trade Agreements
6.10 Conclusion
References.........................................................................................................................................51
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047 VII
LIST OF TABLES,
FIGURES AND BOXES
Tables 3.1 Revenue of Indian Express Delivery Industry . . . 19

2.1 Comparing the Regulations and
Other Requirements in Select Countries 3.2 Contribution of Domestic and International
and India for Express Delivery Industry...............12 Express to the Revenue of the Indian
Express
3.1 India’s Comparative Ranking among Delivery Industry in 2016-17 and 2047..................19
Select Developing Countries in the World
3.3 Contribution of Different Modes of Transportation
Bank’s
Logistics Performance Index 2018...........................18 to the Revenue of the Indian Express Delivery
Industry in 2016-17 and 2047..................................20
3.2 Year-Wise Contribution of Express Mail in Total
3.4 Contribution of Different Segments
Revenue of Department of Posts (India Post)......23
to the revenue of Indian Domestic
4.1 Different Growth Projections for India....................30 Surface Express in 2016-17......................................21
4.2 Growth of Indian Express Delivery 3.5 User Industries of Indian
Industry under Different Growth Scenarios Domestic Surface B2B Express
of the Delivery
Indian Economy (2047).................................................30 Services in 2019-20...........................................21
4.3 B2B and B2C – Scenario Analysis............................31 3.6 Revenue of and Projections for the
E-commerce Industry in India – A Key Driver
5.1 Barriers Faced by EDS Companies in India..........34
of B2C Business Growth for EDS..............................22
5.2 Comparison of Different Airports of India, Hong
4.1 Five Pillars with Examples to
Kong and Singapore (As on January 2022)..........40
Support Future Growth..............................................27
6.1 Global Practices for Treatment of
4.2 Express Industry Growth Scenarios.........................31
International Transportation of Goods....................47
4.3 Examples of Some Assumptions
for B2B and B2C Growth Rates................................32
Figures
1.1 Key Stages of Express Delivery for Boxes
an International Consignment....................................2
1.1 Objective.....................................................................3
2.1 Revenue and Projection of
Global Express Delivery Industry................................6 2.1 Collaboration between Retail,
E-Commerce Companies, SMEs
2.2 Contribution of Different Regions and Express Delivery Companies..........................8
in Global Express Industry in 2020............................6
2.2 Efficiency Gains from Privatisation –
2.3 Key Drivers of Growth..................................................7 The Experience of Germany.....................................10
2.4 Revenue of Global E-Commerce Business................7 2.3 Postal Reforms in the UK...................................10
2.5 Examples of ‘Crowd-Sourcing’ 2.4 India’s Negotiating Strategies and Options............15
Delivery Start-ups................................................9
3.1 International Tie-Ups and
2.6 Key Features and Eligibility Criteria Collaborations – India Post.......................................23
for Voluntary Disclosure Programme
in Singapore and Thailand....................................14 3.2 Some Recent Development in Indian EDS...........24
V EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS
LIST OF ABBREVIATIONS
4IR Fourth Industrial Revolution EICI Express Industry Council of India

ADB Asian Development Bank E-invoicing Electronic Invoicing
AERA Airports Economic Regulatory Authority EU European Union
AFS Air Freight Stations E-Way Electronic Way
AGV Autonomous Ground Vehicle FMCD Fast-moving Consumer Durables
ASEAN Association of Southeast Asian Nations FMCG Fast-moving Consumer Goods
ATF Aviation Turbine Fuel FSSAI Food Safety and Standards Authority of India
B2B Business-to-Business
FTWZ Free Trade Warehousing
B2C Business-to-Customer Zone FTZ Free Trade Zone
BCAS Bureau of Civil Aviation Security G2C Government-to-Consumers
BFSI Banking and Financial Services and GDEX GD Express Sdn Bhd
Insurance C2CConsumer-to-Consumer GDP Gross Domestic Product
CAGR Compound Annual Growth Rate
GIS Geographic Information System
CBIC Central Board of Indirect Taxes and Customs GPS Global Positioning System
CEPA Comprehensive Economic Partnership GST Goods and Services Tax
Agreement
GSTN GST Network
CISF Central Industrial Security Force
IBEF India Brand Equity Foundation
CTO Cargo Terminal Operator
ICAO International Civil Aviation Organization
CUT Common User Terminals
IMDA Infocomm Media Development Authority
D2C Direct-to-Consumer
IMF International Monetary Fund
DGCA Directorate General of Civil Aviation
IT Information Technology
DGFT Directorate General of Foreign
JAM Jan Dhan Yojana, Aadhaar and
Trade DHL Deutsche Post Mobile number
DIY Do-it-yourself
KII Key Informant Interview
DSI Department of Special KYC Know Your Customer
Investigation DTDC Desk to Desk Courier &
MSME Micro, Small and Medium Enterprise
Cargo ECCS Express Cargo Clearance System
NBFID National Bank for Financing Infrastructure
ECTA Economic Co-operation and Trade and Development
Agreement NOC No Objection Certificate
EDI Electronic Data Interchange NPCSCB National Programme for Civil Services
EDS Express Delivery Services Capacity Building
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047 IX
OEM Original Equipment Manufacturer SCRI Supply Chain Resilience Initiative

ONDC Open Network for Digital Commerce SEZ Special Economic Zone
OSS One-Stop Shop SME Small and Medium Enterprise
PAN Permanent Account Number SWIFT Single Window Interface for Facilitating
Trade
PGA Partner Government Agency TFA Trade Facilitation Agreement
PMKK Pradhan Mantri Kaushal Kendra UAE United Arab Emirates
PMKVY Pradhan Mantri Kaushal Vikas Yojana UAV Unmanned Aerial Vehicle
PLI Production Linked Incentive UK United Kingdom
QSI Quantium Solutions International ULD Unit Load Device
R&D Research and Development UPI Unified Payments Interface
RCS Regional Connectivity Scheme UPS United Parcel Service
RFID Radio Frequency Identification USA United States of America
RIL Reliance Industries Limited USO Universal Service Obligation
RMS Risk Management Systems USPS United States Postal Service
Ro-Ro Roll-on-Roll-off VAT Value Added Tax
SAF Sustainable Aviation Fuel WTO World Trade Organization
X EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS
ACKNOWLEDGMENT
We express our gratitude to Dr. Deepak Mishra, Director time to give valuable comments and inputs. We would like
and Chief Executive, Indian Council for Research on to thank logistics experts, legal experts, and policymakers
International Economic Relations (ICRIER) for giving us who provided valuable inputs into the report and during
the opportunity to work in this area and for his constant consultations. A special thanks to Dr. Pritam Banerjee,
support. We thank Express Industry Council of India (EICI) Consultant, Asian Development Bank (ADB) for reviewing
for financial support for compilation, publication and and giving valuable comments. We are grateful to Tara
dissemination of the report. We are especially thankful to Nair for copyediting, Ms. Chhaya Singh for her help in
Mr. Vijay Kumar, Chief Executive Officer, Mr. Nikhil Saini, procuring the research materials, Mr. Anu Mohandas for
Director (Public Policy) and Mr. Amit Balarathinam, co-ordinating meetings and Sanu Kapila of Academic
Operations Head of EICI for encouraging and supporting Foundation for publishing this report.
us in preparing this report. We would also like to thank
EICI members for taking precious
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047 XI
FOREWORD
India has a high growth potential at a time when many of turnover, which needs to more than double to sustain the
its key export markets are facing an economic slowdown. high growth and India’s global value chain integration.
International Monetary Fund predicted that by 2027, India
will be the world’s fourth largest economy, with a gross In the next few years, the EDS industry may see new
domestic product (GDP) of about USD5.53 trillion (after opportunities, arising from greater use of technology and
China, the USA, Japan) and surpassing the GDP of factors like domestic cargo movement through long-haul
Germany (5th) and the UK (6th). In 2047, India will celebrate fast-trains. The report identified certain gaps like value
the 100th year of independence and the government has limit on exports, gaps in technology linkages between
begun work on a blueprint for ‘AmritKaal’ or ‘Vision Customs and other government clearance agencies and
India@2047 – a vision plan for a ‘future ready India’ that manpower and skill shortages, which if addressed, will
focuses on high and inclusive growth. help to lower the trade costs, for our MSME exporters.
This high and inclusive growth is expected to be on the The report rightly identifies the close linkages between the
back of several structural changes/reforms, including the growth of EDS and the growth of its user industries. The
fast pace of infrastructure development, socio-economic user industries benefit from a modern EDS, which can
development, improvement in economic productivity provide just-in-time door-to-door services, reduce delays
(including manufacturing competitiveness), streamlining and costs and enhance their global competitiveness. The
the logistics and supply chains and digital initiatives to EDS industry can help to build resilient supply chains in an
name a few. The path-breaking reform of the single goods era of pandemic, geo-political tension and supply chain
and services tax, along with schemes like the production- disruptions.
linked incentive scheme, the focus on logistics sector The report discusses a set of policies that can provide a
under the PM Gati Shakti - National Master Plan for Multi- competitive environment and level playing field across
modal Connectivity and the National Logistics Policy, 2022, different service providers and modes of transport which
trade agreements with key export markets and along with infrastructure development will in the long
government support for onboarding Micro, Small and run contribute to inclusive growth. Interestingly the EDS
Medium Enterprises (MSMEs) to digital platforms, are industry is not asking for subsidies, but the focus is only
expected to lead to manifold increase in our exports and on trade facilitation and ease of doing business. Some of
fast-track our integration in global value chains. the global best practices mentioned in this report, if
However, at present, the share of exports from India in adopted, will help user industries to become competitive.
total global exports is less than 2 percent and there is a At the same time, the report discusses the need for the
need to enhance India’s integration in global value chains. Indian EDS industry to adopt technology, invest in R&D in
This can be made possible through just-in time, door-to- areas like green technology and innovate. EDS is a
door, fast-track efficient deliveries, which the express network- based industry and there is scope for all network
delivery sector offers. This report presents how the players, including different government agencies, to
express delivery services (EDS) sector can support India in collaborate through innovative revenue sharing models. At
achieving its growth targets as it embarks upon its journey present, such partnerships are limited. Cross-industry
towards AmritKaal – or India @ 2047. The report partnerships and collaborations along with partnerships
highlights India’s strengths in developing as a global between the public and private sectors with a focus on
express hub. In spite of the EDS sector witnessing a inclusive growth and on meeting the UN Sustainable
continuous double digit growth, the Indian EDS sector Development Goals will help India to attain its inclusive
contributes to only around 2 per cent of the industry’s growth targets as it embarks on its journey towards
global “AmritKaal”.
Deepak Mishra
Director and CE,
ICRIER
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047 XII
EXECUTIVE SUMMARY
EXECUTIVE SUMMARY
The growth of domestic and international trade created

• Many countries have focused on the privatisation of
the need for just-in-time fast-track deliveries, which
the postal sector, increased competition and
led to the growth of the express delivery services (EDS)
improvements in productivity and efficiency.
industry. The EDS industry provides integrated door-to-
door transport of documents and products and plays an • Mergers/acquisitions and collaborations/partnerships,
important role in connecting enterprises, especially small along with start-ups and technology upgradation, is
and medium enterprises (SMEs), to the global value driving growth and improving efficiency.
chains. This report presents how EDS can support India in
• EDS is a key sector in trade negotiations and cross-
achieving its growth targets as it embarks upon its journey
border investment flows.
towards Amrit Kaal – or India @ 2047. It identifies the
regulatory, infrastructure, technology and manpower • It is a labour-intensive sector, with strong implications
related barriers and makes recommendations on how to for employment creation in countries like India.
develop India as an express delivery hub, attract
investments, and increase the contribution of the sector
to the economy. The report is based on (a) secondary India: A Small but One of the Fastest Growing
data and information analysis Markets for EDS
(b) 15 key informant interviews (KIIs) and stakeholder
consultations. • The Indian EDS sector contributes to around 2 per
cent of the industry’s global turnover. The sector
grew at a compound annual growth rate (CAGR) of
Global Developments 15.8 per cent from USD1.7 billion in 2012 to USD5.5
billion in 2020.
• The revenue of the global express delivery industry is
projected to increase from USD263 billion in 2020 to • Key growth drivers include the growth of e-
USD378 billion by 2027 and USD484 billion by 2030. commerce, a growing middle class, government
support for digitalisation and start-ups,
• The Asia-Pacific region accounted for 40 per cent of
implementation of the single goods and services tax
the revenue in 2020, and India is one of the fastest
(GST), the focus on logistics sector under the PM Gati
growing markets.
Shakti - National Master Plan for Multi-modal
• Global growth is driven by digitalisation, reduction in Connectivity and the National Logistics Policy, 2022,
the cost of smart phones, an increase in the size of and government support for onboarding Micro, Small
the educated middle-class, internet penetration and and Medium Enterprises (MSMEs) to digital platforms.
the requirements of firms and consumers for fast-
• Domestic traffic contributed to a 77 per cent share in
tracked, on-time online orders and deliveries.
2016-17. By 2047, the contribution of international
express will increase to 25 per cent from 23 per cent.
Key Drivers of Future Growth
n E-commerce, Small and Medium Enterprise(SME)/MSME,

Collaboration
Trading
and Partnership within and
Technology
across Networks
Adoption
Increase in the Number of Middle-Income
Logistics Development,
ConsumersIncrease in Trade and Trade Faci
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS X
Five Pillars with Examples to Support Future Growth

Drivers of India’s Vision of 17 Trillion Dollar Economy by 2047
Infrastructure Demand Driver Skilling Technology Structural
Integrated Infrastructure
Consumption Driven Growth and Inclusive
Skilled
Demand
Manpower to Drive Economic Growth Technology Driven Growth
and Network Planning and Development
Rapid Urbanisa-
PM Gati Shakti Master Plan for Multi-modal tion (40% by 2030) India’s Vibrant Demography of Working
Connectivity E-Governance
Age Population
Dedicated Freight Corridors Rising Income Levels and Growth in Tier
Capacity
2 andBuilding
Tier 3 Cities
Commission
and Towns
for Capacity
JAM Trinity
Building Through Mission Karmayogi
Air Frieght Volumes & Udaan RCS Linkage with Regional and Global ValueSkillChains
India UPI (National Payment System)
Single Market Owing to GST
Industrial Growth including Shift to Renewables
PLI Scheme
Entry of Big Firms and Big Business Houses Investing in Key Sectors
National Industrial Corridors
Shift to Greener Modes/Renewable Energy
Roadways and air transport contributed to a share of The express industry has historically grown at 2 to 2.5
55 per cent and 45 per cent respectively in 2016-17. times the nominal GDP growth rate. The increase in
The share of roadways may change to 50 per cent, economic activity is expected to at least double the demand
air express to 40 per cent and railways to 10 per for business-to-business (B2B) and business-to-customer
cent. Development of freight corridors and the use of (B2C) express delivery services. Growth in economic
long- haul rail transport by express companies will be activity is expected to result in greater express movement
a game changer in this sector. in domestic as well as international markets. The three
different growth projections for the EDS sector in India
under three different scenarios for GDP growth are as
Growth of the Indian Express Delivery Industry follows:
under Different Growth Scenarios of the Indian
Economy (2047)
• An efficient EDS sector can contribute significantly
Unleashing the Contribution of the EDS
to reducing logistics cost in India, but, to achieve
• The growth of EDS is related to the growth of its the full potential of this sector, the barriers have to
user industries; at the same time, user industries be eliminated or reduced and global best practices
benefit from a modern EDS, which can provide just- mentioned in this report adopted.
in-time door-to-door services, reduce delays and
enhance their global competitiveness. The top five barriers faced by the sector and the reform
requirements that can help the sector achieve its full
• The growth of cross-border EDS is related to the potential and support India’s journey towards Amrit Kaal are
removal of barriers to cross-border trade and a presented in the table below.
conducive domestic policy.
Scenario GDP Growth Growth of EDS
Optimistic 8-8.2% 21%
Conservative 7.2-7.5% 18%
Pessimistic 6% 15%
Barriers
Way Forward
Regulatory Barriers Addressing Regulatory Gaps
(a) Issues Related to the Courier Imports and Exports (Electronics Clearance)
(a) The Courier Regulation,
Imports 2010(Electronics Clearance) Regu
and Exports
Remove value limit on exports through express mode
Remove the restriction on imports of commodities through courier mode that re

Value limit restrictions on exports through courier/ express Implement voluntary disclosure to provide operational certainty and stability as
Restrictions on import of certain commodities which require clearances from partner government agencies (PGAs)
The KYC documents such as GSTIN or export-import code are now available on
to provide those details, which will help in better authentication, rather than ask
Suspension of the licence of authorised couriers pending investigation when there is no wilful act of non-compliance committed by the authorised co
The authorised couriers are required to verify the ‘know your customer’ (KYC) details of the exporter and then store and present this data to the cust
a KYC number requires courier companies to maintain additional checks and balances to ensure privacy and authorised use of personal data. The del
(b) GST Related Barriers (b) While GST has been able to integrate the Indian market, there
There should be a single pan-India registration for GST instead of requiring that
In nearly all states, goods transit has to be accompanied by significant docume
Requirement
Separate GST registration is needed for each state, undermining the concept of as
of India e-way bill should
a single marketbe
ordispensed with
‘one nation, since
one tax’ Electronic Invoicing (e
e-invoicing
Penalty should not be higher for transporters and there should not be discrimin
Multiple documentation requirements
Issues with Electronic Way (e-way) bills – short validity time
Higher penalty amount for transporters as compared to consignor/consignee, which is discriminatory

Barriers
Barrie Way
Way Forward
frastructure
Infrastructure
development
Related
under
Barriers
PM Gati Shakti – National Master Plan for Multi- modal Connectivity, will help to ad
(a) Railways (a) There should be modal shift from road to rail for delivery
Dedicated corridors with high-speed trains will benefit EDS
Secure facilities for express cargo downloading and uploading at railway s
Lack of dedicated freight corridors
Private investment should be encouraged
Slow movement of trains, lack of secure uploading and downloading facilities in stations, issues related to service quality and safety of consignment
Private participation is only allowed in container transportation, and express industry is unable to use the services of fast passenger trains
Roll-on-Roll-off (Ro-Ro) facility is only available at selected destinations
Ro-Ro facility should be widely available
(b) Road Transport (b) Road connectivity needs a holistic approach

National/state highways – inadequate capacity, poor riding quality, distressed
Better
bridges,
quality lack
of roads,
of by-pass
traffic roads,
management,
wayside connectivity
amenities and
to safety
Tier 2 and
concerns
3 cities, w
(c) Air Transport (c) Focus on aviation infrastructure under the PM Gati Shakt
Make available freighter bays close to express terminals, staging areas for
Creation of express terminals should be included in the airport master pla
Permit AFS near airports to facilitate export and import clearances
Rationalise charges and fees to reduce logistics costs
Lack of dedicated space for express providers at airports. Parking bays are not at close proximity
Airport operators charge a high price for the movement of shipments from/to air freight stations (AFS). High and differential royalty charges. High av
Multiple clearances required to commission express and cargo terminals –no time bound clearance or single window clearance
There should be single window clearance in a time bound manner; the sin
City/Municipal Level Issues
Facilitate Access and Fast-track Goods Movement within Cities
Different timings for entry of express vehicles in different states Provide flexibility to express cargo on entry and exit timings
Lack of dedicated parking space for express vehicles Have planned dedicated space for express vehicles
Skill Related Barriers Focus on Skill Development and Training
Shortage of skilled manpower/workforce at different regulatory agencies Map the skill shortages and requirements in key government agencies and acco
Collaborate with the private sector and encourage more private investments in
Gaps in skilling programmes for the EDS sector
Technology Related Barriers Make Technology a Key Driver of Growth and

Trade Facilitation
Lack of technology integration between agencies such as ECCS and GST Network
Improve(GSTN)/Directorate
efficiency, interdepartmental
General ofco-ordination,
Foreign Trade risk
(DGFT)/Special
managementEconomic
and dataZ
Limited use of technology by micro, small and medium users Make e-commerce the future driver of growth and for linking MSMEs to global v
express companies and their e-commerce partners in key government initiatives
Barrie Way
1 INTRODUCTION
2 EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS
INTRODUCTION 1
consumers and suppliers to keep track of their shipments
Express delivery operators make it possible for through the use of digital technology. Express delivery
businesses of any size to compete effectively in the companies integrate ground and air networks and provide
modern global marketplace, serving their customers services like customs clearances, (including the payment
across a continent or around the world. of required duties and taxes), packaging, labelling, billing,
payment collection, return, and exchange.
- Global Express Association
Figure 1.1 depicts the different stages of express delivery
The growth of domestic and international trade created – from collecting the consignment from a customer in one
the need for just-in-time fast- track deliveries, which led to country to the delivery to another customer in a different
the growth of the express delivery industry. This industry country.
provides services that include integrated door-to-door Express delivery services (EDS) add value by providing (1)
transport and quick delivery of letters, documents, parcels, convenient/flexible timings for pick-up and delivery, (2)
samples, products, primarily through land (road and railways) guaranteed time-bound delivery, (3) reliability of service,
and air transport. The time of delivery across most global (4) safety and security of consignments, (5) track and
destinations varies between same-day delivery and trace facilities for visibility of consignments during
delivery between 24 and 72 hours. Express delivery shipping,
allows both (6) proof of delivery, and (7) 24×7 call centre facilities for
Figure 1.1
Key Stages of Express Delivery for an International Consignment
COB 19h30 21h30
Consignor Pick-Up Local Station (Origin) Country Gateway (Outbound)

Export Clearance
23h30
Hub 03h30
Early Morning 08h30 05h30
Consignee Delivery Local Station (Destination) Country Gateway (Inbound)

Import Clearance
Source: Compiled by the Authors.

EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047 3
handling queries. Hence, these are considered premium and enhance global competitiveness. The growth of cross-
services vis-à-vis ordinary mail delivery services border EDS is related to the removal of barriers to cross-
(Mukherjee, et. al., 2012). The services can be government- border trade. India has fast-tracked the process of signing
to-consumers (G2C, sending government documents like trade agreements with key trading partners, which is
passports), B2B, B2C and consumer-to-consumer (C2C). expected to remove trade barriers and increase
Globally, the largest components are B2B and B2C. While international trade manifold. The single GST has helped to
users of express delivery services are firms of all sizes, develop India as a single market and, the Indian Prime
small and medium enterprises (SMEs) are among the key Minister launched ‘Gati Shakti – National Master Plan for
users since they account for over 80 per cent of the firms Multi-modal Connectivity in October 2021’ and the National
globally [World Trade Organization (WTO), 2016]. Logistics Policy, 2022, which will help to improve the
efficiency of this sector. Given these positive initiatives by
With increase in trade, both domestic and cross-border,
the government, EDS can play a key role in India’s growth
the express delivery industry has seen significant growth.
story. However, there are no recent studies on the growth
Globally, factors such as the increase in e-commerce,
and development of the express delivery sector in India
rise in the use of smartphones and penetration of the
and how it can be a key contributor to India’s growth
internet has led to the growth of this industry. Some of the
story. This report aims to fill the lacuna.
traditional users of express delivery are knowledge-based
and technology industries like financial services,
electronics, consumer durables and telecommunications. Box 1.1: Objective
However, after the coronavirus (COVID-19) pandemic,
with the growing demand for healthcare essentials (such
as hospital supplies, vaccinations, gloves, sanitizers, etc.), The objective of this report is to present how the express delivery sector can co
the healthcare sector has become an important user of
express delivery services globally along with fast-moving
consumer goods (FMCG), (The Insight Partners, 2021a
and Business Market Insights, 2021).
In 2020, the turnover of the global express delivery
industry reached a value of USD263 billion from USD178
billion in 2014. Countries such as the United States of
America (USA), the United Kingdom (UK), Germany and
Singapore are the largest express delivery markets in the
world. However, countries such as China and India are
among the fastest growing markets. In 2020, the turnover
of the Indian express delivery sector was only USD5.5
billion, with a small share (around 2 per cent) of the global
market, but the sector in India has seen a high compound
annual growth rate (CAGR) of around 15.8 per cent in the
recent past (Deloitte, 2018, and Khatri, 2022). 1.1 Methodology and Data Sources
The Indian government has begun work on a blueprint for The report is based on (a) secondary data and information
‘Amrit Kaal’ or ‘Vision India@2047 – a vision plan for a analysis, (b) 15 KIIs based on semi-structured questionnaires
‘future ready India’ that befits the 100th year of India’s and (c) stakeholder consultations with the express
independence. India aspires to be the third largest industry, Express Industry Council of India (EICI) and user
economy in the world by 2047 and this requires that both businesses.
domestic and international trade grow manifold – EDS will
play a key role in helping India achieve its growth targets. While this report covers the global market, we have
selected fourteen countries and the European Union (EU)
‘Vision India@2047’ focuses on inclusive growth. Earlier for cross-country regulatory comparisons. Of these, eight
studies have shown that the EDS sector has significant are developed countries (Australia, Canada, Germany,
backward and forward linkages – from creating jobs to Japan, New Zealand, Singapore, USA and the UK) and five
connecting SMEs to the global market to give Indian are developing countries (China, India, Malaysia, Thailand
consumers a wide range of products at their doorsteps and Vietnam). India has trade agreements with the
(Deloitte 2018; Mukherjee, et. al., 2012). The growth of Association of Southeast Asian Nations (ASEAN) and some
EDS is related to the growth of its user industries; at the of its members. India is also engaged in the supply chain
same time, user industries benefit from a modern EDS, resilience initiative and has trade agreements with Australia
which can provide just-in-time door-to-door services, (interim), Japan and Singapore, and is negotiating trade
reduce delays agreements with Canada, the UK and the EU.
Using data provided by the organised express industry, India is today a small but fast-growing market for EDS.
EICI and available sources like the annual reports of Chapter 3 examines the market size, the share of different
companies and published reports on the express delivery segments, domestic and international, and how it is likely
sector, three growth scenarios for the express delivery to change by the year 2047. It also examines the share of
sector have been presented, namely, optimistic, different modes of transportation and the likely changes
conservative and pessimistic. In addition, a four-scenario by 2047. Presenting the key products carried by express
analysis of the growth of different segments within the mode of delivery, it looks at the changes in the B2B and
express industry is also presented. For the analysis, apart B2C segments – the latter has grown at a fast pace with
from published reports and data sources, data provided by the growth of e-commerce. This chapter also presents the
stakeholders like worldwide revenue, revenue in India and structure of the industry in India and some recent trends
other data from published documents like annual reports, and developments, including technology adaptation.
have helped estimate the market size.
Chapter 4 presents the key growth drivers of the Indian
economy and the EDS sector as the country embarks on
1.2 Layout of the Report its journey towards Amrit Kaal. It presents three-scenario
growth projections for EDS, namely, optimistic,
Chapter 2 presents an overview of the global market size,
conservative and pessimistic, and a four-scenario analysis
future growth projections and projections by key regions/
of the growth of the B2B and B2C segments.
markets. It also presents the key growth drivers, the
structure of the global industry and some recent Chapter 5 focuses on the barriers faced by the industry.
development in terms of scale enhancements, adoption of These can be broadly classified under regulatory barriers,
digitalisation, technology and innovation. The chapter then infrastructure related issues, manpower shortage related
examines recent changes in the regulatory landscape that issues, technology gap related issues and other issues.
have helped the EDS industry grow. It also discusses
Chapter 6 focuses on how the EDS sector can play a
cross-border liberalisation of the sector under trade
bigger and better role in supporting the government to
agreements.
achieve its vision of Amrit Kaal.
2
AN OVERVIEW OF GLOBAL EXPRESS
DELIVERY INDUSTRY
AN OVERVIEW OF GLOBAL
EXPRESS DELIVERY INDUSTRY
The global express market had a CAGR of 4.2 per cent Shakti – National Master Plan for Multi-modal Connectivity 1
2
between 2003 and 2020 (see Figure 2.1). From a revenue and the National Logistics Policy, 2022, in India will lead to
of USD263 billion in 2020, it is projected to reach USD378 overall development in transport and logistics
billion by 2027 and USD484 billion by 2030. infrastructure, which will be a key growth driver. With the
right technology and efficient transport and logistics,
Figure 2.1 customers can now be accessed in remote and rural areas.
Revenue and Projection of Global Express Delivery Industry Regional initiatives like that taken by the ASEAN to
600 integrate its member countries and implement trade
484 facilitation measures, along with a large number of trade
500
agreements that facilitate the removal of tariffs and non-
400 378
tariff barriers to trade, will enhance trade and facilitate the
300 239 263 growth of EDS. It is expected that the express delivery
USD
200 175 178 198 industry in Asia-Pacific will reach USD171.5 billion in 2027
130 from USD105 billion in 2020 at a CAGR of 7.3 per cent
100
(Research and Markets, 2021b).
0
Figure 2.2
2003 2008 2014 2016 2019 2020 2027E 2030E Contribution of Different Regions in Global Express
Year Industry in 2020
Source: Compiled by authors from the data provided by Allied
Latin America
Market Research (2021), Deloitte (2018), Research and and Caribbean
Markets (2021a), The Insight Partners (2021a), Oxford Middle 8.7%
(2009) and KIIs. East and
Africa 2.5% North
Note: E - Estimate.
America
25.3 %
2.1 Growth by Regions

Among the different regions, the Asia-Pacific region is the
Asia-Pacific
largest contributor to the global express delivery industry 39.9%
Europe
in terms of revenue. In 2020, the Asia-Pacific region
23.5 %
contributed nearly 40 per cent to the revenue of the global
express delivery industry (see Figure 2.2). Within this region,
India, China, and
Singapore are the largest and fastest growing markets for Source: Compiled by authors from Research and Markets
(2021b); Market Research (2021); The Insight Partners
express delivery. India and China are also among the (2021b); and Business Market Insights (2021), and KIIs.
fastest growing e-commerce markets. The growth in
developing countries and emerging markets is driven by
North America, which was earlier the largest market, is
digitalisation, reduction in the cost of smart phones, rise
now the second largest contributor in terms of revenue to
in the size of the educated middle-class and internet
the global EDS industry. The express delivery market in
penetration. Apart from large and mid-sized firms, SMEs
North America is expected to increase to USD94.9 billion
and consumers in these markets want fast-tracked, on-
in 2027
time online orders and deliveries. Manufacturing industry
is getting automated and industries like automobiles and 1. PM Gati Shakti is a digital platform to bring 16 ministries
auto component, handicrafts, electronics and engineering including railways and roadways together for integrated
goods, pharmaceuticals and medical devices, are planning and
co-ordinated implementation of infrastructure connectivity projects.
increasingly adopting online commerce. Governments in Multi-modal connectivity will provide integrated and seamless con-
many countries are supporting digitalisation and logistics nectivity for the movement of people, goods and services from one
modernisation. Initiatives like the PM Gati mode of transport to another. It will facilitate the last mile connec-
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS
tivity of infrastructure and reduce travel time for people. Available 7
at https://www.india.gov.in/spotlight/pm-gati-shakti-national-mas-
ter-plan-multi-modal-connectivity (last accessed on April 2, 2022).
from USD66.5 billion in 2020 at a CAGR of 5.2 per cent lucrative opportunities in the last-mile delivery of services
(The Insight Partners, 2021b). Europe is the third largest along with driving the growth of the global express
market, and the European express delivery market is delivery market. MSMEs and the trading sector are key
expected to reach USD98.1 billion by 2027 from USD61.9 users of EDS, and their growth and their onboarding into
billion in 2020 at a CAGR of 6.8 per cent (Business Market e-commerce platforms will drive the growth of this sector.
Insights, 2021). The increase in the size of middle-class consumers in
countries like India and Bangladesh is another key driver.
2.2 Key Growth Drivers
Figure 2.4
Express delivery companies are increasingly adopting Revenue of Global E-Commerce Business
technology and providing more value-added services 30 27.15
to customers to the enhance delivery process. Regular
25
users of express delivery services in the global context
are mainly knowledge-based and high-tech industries like 20
Value in USD
financial services, automotive, information technology 15
13
(IT), telecommunications and pharmaceuticals. However, 9.09 10.36
in recent years, the e-commerce industry has become the 10
largest user of the express delivery industry. 5
The five key drivers of future growth are shown in Figure
2.3. Collaboration between e-commerce and express 0
2019 2020 2021 2027E
delivery services, transport departments, etc., will be Year
one of the key drivers, along with logistics development,
Source: Compiled by authors from Grand View Research (2020);
increase in trade and trade facilitation. The emergence of IMARC (2021) and KIIs.
new technologies such as logistics 4.02 is likely to generate
Note: E - Estimate.
Figure 2.3
Key Drivers of Growth
Key Drivers of Growth of the Express Delivery Industry
Growth in e-commerce, SME/MSME, Logistics development, increase in trade

Collaboration and partnership within and across networks Increase in middle-income consumers and trade facilitation
trading Technology adoption
Source: Based on KIIs.
In recent years, online retail and e-commerce have seen

2. Logistics 4.0 makes use of smart technology based containers, tremendous growth. The global e-commerce market was
vehicles, pallets, and transport systems. This ensures the creation
of a fully networked supply stream chain that offers supply chain valued at USD9.09 trillion in 2019; it reached USD13
managers, shippers, freight forwarders, and others the necessary trillion in 2021 and is expected to reach to USD27.15
transparency and visibility to route transport and perform other trillion in 2027 (at a CAGR of 14.7 per cent) (see Figure
logistics tasks in an optimal way. Logistics 4.0 comprises a mix of 2.4). Customers are quickly onboarding e-commerce
technologies for smooth functioning. Some include global posi-
tioning system (GPS), barcodes, data matrix codes, radio frequency platforms due to convenience, and the range and
identification (RFID) and sensors, electronic data interchange (EDI), availability of goods online with real-time ratings,
the Internet and telematics, as well as on-site and cloud feedback, and best prices that can be delivered to the
architecture and software.
address of their choice. In 2020,
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS 9
there were 9.3 billion cross-border orders globally, and 60

per cent of them were intercontinental.3
2.3 Structure of the Global Express Delivery
Industry and Recent Developments
In 2019, the B2B segment accounted for a major share in
the global e-commerce market, with a share of around 63 Over the years, the express delivery industry has evolved
per cent (Grand View Research, 2020), the remaining significantly from being basic courier service provider
being accounted for by the B2C segment. In 2020, the delivering documents and parcels to being a provider of
share of the B2C segment suddenly increased – to about integrated, time-bound, door-to-door delivery of
two-thirds of the global e-commerce market – due to the specialised items such as high-tech products and general
pandemic (also see Allied Market Research, 2021). This is airfreight commodities.
attributed to the growing inclination of consumers toward The global EDS industry is highly fragmented with a few
purchasing from e-commerce platforms. Some studies global multinationals, many regional companies and a
predict that the B2C segment will dominate the global e- large number of local and country-specific or region-
commerce market until 2030 while others contend that the specific companies. Some of the leading companies include
B2B segment will grow at a high CAGR of 7.2 per cent Deutsche Post (DHL), United Parcel Service Inc. (UPS),
during 2020 and 2030 (see Allied Market Research, 2021) FedEx Corporation, Aramex International LLC, SF Express
as SME businesses in countries like India, South Africa and and YTO Express Group Co. Among these EDS companies,
in regions like ASEAN are moving on to online platforms. FedEx, DHL Express and UPS are the largest. They are
In the case of India, government initiatives like Make in known as the ‘global integrators’ as they combine land and
India and Start-up India, along with targeted programmes air transport services with shipment handling, customs
like the Production Linked Incentive (PLI) Scheme to attract clearances, and other information-intensive activities that
large firms and make India a part of the global value chain, enable them to provide reliable end-to-end pick-up and
will lead to the growth of the B2B mode. In addition, delivery services. Each of these companies operate in
consumer preference for online marketplaces with the more than 200 countries and employ more than a million
initiatives taken by EDS companies to penetrate smaller people worldwide. These three integrators have made
cities and remote areas will drive the growth of the B2C significant investments to expand their capacity
segment (KIIs and Grand View Research, 2020). organically, modernise their network, digitalisation and
Box 2.1: Collaboration between Retail, E-Commerce research and innovation, and have been expanding
Companies, SMEs and Express Delivery Companies inorganically to widen their capabilities.
Postal service providers in many countries also provide
express and other value-added services like the Speed
Express delivery is adopted by brands, retailers and e-commerce companies to offer better customer service by delivering parcels quicker. The increa
Post of and
Small and medium enterprise have low volumes and they need to send samples India Post within
products in India.
and These postal service
across countries. Many ofproviders
them are now movi
may Partners
Source: Compiled by authors from Allied Market Research (2021) and The Insight have an international presence, and/or they operate
(2021a).
through partnerships and collaborations. Most countries
have a number of smaller players that operate within a
specific geography or niche segment; these are in some
cases low- cost low-price players that cater to mostly
document and small parcel delivery services within a given
city or region.
2.3.1 Examples of Recent Developments

in the Global EDS Industry
There have been some key developments within the EDS

industry that is facilitating growth, scale expansion and
improvement in efficiency and productivity through both
inorganic growth and use of technology. These are
described below.
• Mergers and Acquisitions and Partnerships/
Collaborations with Postal Operators
3. https://www.mckinsey.com/industries/travel-logistics-and-infrastruc- Mergers and acquisitions among express companies,
ture/our-insights/signed-sealed-and-delivered-unpacking-the-cross-bor-
der-parcel-markets-promise (last accessed on April 2, 2022).
and partnerships and collaborations with industry has
led to scale expansion. For example, in May 2016, FedEx
Corporation acquired TNT Express (Netherlands) (Deloitte,
2018), which helped the former expand in Europe and
Middle East. Similarly, DHL Express (Singapore) Pte. Ltd.
1
acquired
a major stake in Blue Dart in 2005. Singapore
Post
Limited (SingPost), a government-owned limited liability venture provides a platform for the two companies to
company, made several acquisitions in the past few years collaborate, leveraging among other things QSI’s e-commerce
to enhance market presence and improve scale and warehousing and last-mile delivery services.6
efficiency. It has a stake of 27 per cent in Malaysian
logistics company GD Express Sdn Bhd (GDEX) and Many express delivery companies are tapping into the
purchased a majority stake of 96.3 per cent stake in Trade ‘sharing economy’ by matching available capacity with
Global Holdings.4,5 China’s Alibaba Group has a stake of 34 delivery needs. This has led to the entry of players from
per cent in SingPost- subsidiary Quantium Solutions other spectrums of the ‘sharing economy’ into the logistics
International (QSI), which provides e-commerce logistics segment as well as the entry of a number of start-ups in
and fulfilment services, including warehousing in the Asia- this sector (see Figure 2.5 for some examples).
Pacific region. This joint-
Figure 2.5
Examples of ‘Crowd-Sourcing’ Delivery Start-ups
Start-up, Parent Company, Country of Origin and Year of Launch Nature of Services of Launch
UberCargo; It allows consumers to load and deliver larger items such as mattresses, sur
Uber Technologies Inc., USA; 2015
It is an on-demand start-up, which offers food delivery services

Postmates;
including restaurant-prepared food, grocery items, alcohol, etc.
Uber Technologies Inc., USA; 2020
The service relies on mobile phone applications.
It offers online grocery delivery services in the USA

Instacart; USA; 2012
and Canada. Instacart connects customers with their
favourite stores in their areas and delivers their order.
It is an on-demand, precision delivery start-up that helps

customers in intra-city transportation of items by matching them
Dolly; Updater, USA; 2014 with registered drivers. It also offers a 30-minute window anytime
between 8 a.m. to 9 p.m. throughout the year for last mile
delivery.
It is an innovative platform that connects people who need to

Nimber; Nimber Inc., UK; 2015
send something from one place to another with people who
happen to be going that way. It matches commuters and
travellers
with consumers looking to ship items within a city and nationwide.
Shiprocket; It offers end-to-end services from product packaging to last-mile

BigFoot Retail Solution, India; delivery to customers and has tie-ups with different small courier
2017 companies. It helps e-commerce sites choose multiple courier
partners for delivering timely orders to customers. It deals
with the direct-to-consumer (D2C) market segment and deals
with online-only brands, and social commerce retailers.
Source: Compiled by authors from KIIs and from https://techdrive.co/ubercargo-will-help-you-transport-your-stuff/ (last accessed on July 4, 2022);
https://www.cnet.com/tech/mobile/ubercargo-will-take-your-couch-on-a-ride (last accessed on July 4, 2022); https://dolly.com (last
accessed on July 4, 2022); https://www.nimber.com (last accessed on July 4, 2022); and https://www.shiprocket.in (last accessed on July 5,
2022).
4. Trade Global provides a range of services that support online 5. https://sg.finance.yahoo.com/news/singpost-acquires-tradeglobal-hold-

retail and e-commerce websites, including website development, ings-us-032734531.html (last accessed on March 26, 2022).
content management, analytics, global fulfilment, and logistics.
6. https://www.zdnet.com/article/singpost-packs-in-another-206m-
investment-from-alibaba/ (last accessed on March 26, 2022).
• Digitalisation, Technological Advancement,

Box 2.2: Efficiency Gains from Privatisation –
and Innovation
The Experience of Germany
The global express industry has gone through significant
digital transformation starting with the use of the GPS and
Germany fully privatised ‘Deutsche Post’, into a public company in 1995. In 2
RFID technologies to track vehicles and parcels to satellite
Source: Compiled by Authors from https:/ expat-info/communication/post-mail-
computer systems that have helped to improve internet-
connected courier fleet monitoring to, more recently, the
use of fourth industrial revolution technologies (4IR) to
collect, collate and analyse data to identify and address
inefficiencies, reduce costs and offer better services to
customers.
In transportation, autonomous ground vehicles (AGVs)
with parcel lockers and unmanned aerial vehicles (UAVs)/
drones are being piloted by express and logistics
companies, especially to reach out to remote and rural
areas. E-commerce companies are also focusing on such
technologies while experimenting with robotics and
automation to reduce value chain inefficiencies. Box 2.3: Postal Reforms in the UK
Innovations are also being seen in allied sectors such as
cold chains. Packaging innovation helps to increase shelf- Postal Services Act, 2011: In the UK, the Postal Services Act was passed in
life and reduces damages in perishable goods such as New Regulatory Framework for UK Postal Market: The seven-year regula
frozen foods, pharmaceuticals and sensitive high-tech Alongside deregulation, Ofcom put in place a number of safeguards. These i
Source: Holder and Smith (2013).
products, reducing the need for climate-controlled trucks
and containers. Companies are now focusing on green
energy and green technology and there are innovations in
this area.
A number of start-ups have come up in the express
delivery sector. These include DroppX (Finland), Delhivery
(India), Ecom Express Limited (India), Xpressbees (India)
and Urbeez (cargo bike courier, Belgium). According to KII,
India ranks among the most vibrant express delivery start-
up environment globally.
2.4 Global Developments and Regulatory Reforms:

Leading to Growth and Efficiency of EDS in
Different Countries/Markets
Globally, countries have focused on privatisation and
improvements in the efficiency and productivity of their
postal sector. The postal sector is undergoing digitalisation
and innovation, leading to improvement in service quality.
The reform in the postal sector began in the 1990s with
corporatisation. Some countries have chosen to transform
their postal services into a fully state-owned, but limited
liability, company, while others fully privatised their postal
sector. Countries such as Germany and the UK have fully
privatised postal services, which has significantly improved
the quality of services and has led to better use of physical
infrastructure and resources (see Box 2.2 and 2.3).
The experience of the UK in reforming the postal sector is
presented in Box 2.3. The UK experience of giving Royal
Mail pricing freedom is a good example of allowing the In many countries, the postal sector is still under the
postal service to operate on a commercial basis. government. For example, India Post in India is under
the Department of Posts,7 Ministry of Communications, allowed to be carried through the express mode, as the
while Post Malaysia in is under the Malaysian Ministry of customs IT system is not linked to PGAs and there are
Communications and Multimedia. regulatory gaps and manpower shortages (see Chapter 5).
• Role of Regulations in Facilitating Growth This is at variance with global best practices and results in
the lack of a level playing field with general logistics (see
Global experience shows that regulation must facilitate in Table 2.1).
growth and regulatory changes should be aligned with the
growth and development of the sector. This can lead to In most countries, there is no requirement for express
new regulations or amendments to existing regulations in companies to register with customs unless they take on a
postal services and EDS. Table 2.1 shows that many custodian or brokerage role. Every company doing cross-
countries are amending their existing postal regulation or border trade needs a unique identification number (UID)
have come up with new regulations in the past decade. but in many countries, this is integrated with a single
For example, in March 2022, the USA enacted a new act, commercial or tax registration ID, whereas in India, it is not.
namely, ‘The Postal Service Reform Act of 2022’. This Act Table 2.1 shows that except India, none of the other
makes certain changes in the areas of ‘Postal Service countries have a value limit on exports through
Financial Reforms’ and ‘Postal Services Operational courier/express. In India, there is a value limit of INR5
Reforms’8 to move the United States Postal Service (USPS) lakh on exports through courier/express and the KIIs show
towards financial stability, ensuring six-day delivery, that this inhibits the integration of Indian SMEs in global
enhancing the transparency of postal operations, and value chains.
maximising participation in a medical programme,
‘Medicare’, to strengthen the USPS. Singapore amended its In a majority of the countries studied, there is no separate
Postal Services Act, 1999, in May 2021 9 to appoint the licence required from concerned department/ministries
Infocomm Media Development Authority (IMDA) as the to provide international inbound express/courier services,
postal authority to establish, install, operate and maintain except for Malaysia, Singapore and India. For example, in
the locker network, which will comprise 1,000 locker Malaysia, Licence ‘A’ and ‘B’ is required from the Malaysian
stations by end-2021. The stations will be located in Communications and Multimedia Commission to provide
areas such as HDB estates, public transport nodes, and international inbound courier services.12 In Singapore, a
community centres and clubs managed by the People’s courier company has to apply for the express letter
Association. These amendments have brought the services services (Class) licence from the IMDA.13 In India, for
closer to citizens and helped the growth of the sector. international trade, express/courier companies have to
take a licence from the Department of Customs.14
As shown in Table 2.1, most countries do not have
separate regulations for EDS. China, to the best of our Overall, one key takeaway from global regulatory
knowledge, is the only country that has started amendments is the recognition of postal services as a
implementing province-specific regulations for the express public service with universal service obligation (USO) at its
delivery. In 2021, the province of Zhejiang enacted the core. Amendments should seek to improve USO by driving
provincial regulation, ‘Regulations on the Promotion of efficiencies, productivity, delivery quality, access, reach
Zhejiang Express Industry’.10 and competitiveness. Express delivery is a competitive
sector, and the postal authorities should not try to regulate
Most countries studied have some restricted commodities
service providers in the EDS segment in a way that adds to
that are not allowed to be exported or imported through
lack of choice and/or compromises on the quality of
courier/express services. These restrictive commodities
services for users.
include arms and ammunition, alcohol, harmful chemicals,
antiques, etc. However, in India, commodities requiring a
regulatory approval11 before customs clearances are not
7. https://www.indiapost.gov.in/VAS/Pages/AboutUs/Organisation.aspx
12. Postal Services (Licensing) Regulations, 2015, Malaysian Commu-
(last accessed on June 6, 2022).
nications and Multimedia Commission, Government of Malaysia,
8. The Act is available at https://www.congress.gov/117/plaws/publ108/ Government of Malaysia, https://www.mcmc.gov.my/skmmgovmy/
PLAW-117publ108.pdf (last accessed on April 22, 2022). media/General/pdf/Postal-Services-Licensing-Regulation-2015.pdf (last
9. The Act is available at https://sso.agc.gov.sg/Acts-Supp/10-2021/Pub- accessed on May 10, 2022).
lished/20210512?DocDate=20210512 #top (last accessed on April 13. ‘Guidelines for the Registration of Express Letter Service (Class)
22, 2022). Licence’, Infocomm Media Development Authority, Government
10. For details, see https://www.zj.gov.cn/art/2021/10/8/ of Singapore, https://www.imda.gov.sg/-/media/Imda/Files/Regula-
art_1568565_59130210.html (last accessed on May 10, tions-and-Licensing/Licensing/Postal/Express-Letter/GuideExpressLetter.
2022). pdf (last accessed on May 22, 2022).
11. For example, from regulators such as the Food Safety and 14. ‘Courier Imports and Exports (Electronics Clearance) Regulation,
Standards Authority of India. 2010’, Government of India, https://courier.cbic.gov.in/COURIER-IM-
PORTS-AND-EXPORTS.pdf; (last accessed on May 10, 2022).
Table 2.1
1
Comparing the Regulations and Other Requirements in Select Countries and India for Express Delivery 1
Industry
Australia Canada China Germany India Japan Malaysia New Singapore Thailand USA UK Vietnam
Zealand
EDS Specific No No Yes, at the No No No No No No No No No No

Regulations provincial
level
New Regulations Yes No No No No No Yes No Yes No Yes No No
on Postal Services Australian Postal Postal Postal
in the Last 10 Postal Services Services Service
Years Corporation (Licensing) (Control of Reform
(Performance Regulations Designated Act,
Standards) 2015 Postal 2022
Regulations Licensees)
2019 Regulations
2012
Amendment to No No Yes No No No Yes No Yes No No No No
Earlier Postal Postal Postal Postal
Regulations in (Amendment) Services Services

Last 10 Years Act, 2018 (Post Office (Amendment)
Rules, 1947) Act 2021
(Amendment)
Regulations
2020
Postal Regulation No Yes No Yes Yes Yes No Yes No Yes No Yes Yes
is More than 20
Years Old
Restrictions No No No No Yes No No No No No No No No
on Carrying
Commodities
through Express
Mode, which
Require an NOC
from PGAs
Value Limit for No No No No Yes No No No No No No No No
Exports through
Courier
Australia Canada China Germany India Japan Malaysia New Singapore Thailand USA UK Vietnam

Zealand
Requirement of a Yes Yes No No Yes No Yes No Yes No No No No

Separate Licence
from Concerned
Ministry/
Department
to Provide
International
Express/Courier
Services
Customs – Yes No No No No No No No Yes Yes Yes No No
Voluntary
Disclosure
Programme
Source: Compiled from Legal text of Regulations available at websites of the concerned ministries and customs departments; and ‘Country and Territory Specific Lists of Prohibited and Restricted
Items – Import Prohibitions and Import Restrictions’, FedEx, https://crossborder.fedex.com/us/assets/prohibited-restricted/index.shtml (last accessed on May 2, 2022). ‘Australian
Postal Corporation (Performance Standards) Regulations 2019’, Government of Australia, https://www.legislation.gov.au/Details/F2019L00123#:~:text=%20Australian%20Postal%20
Corporation%20%28Performance%20Standards%29%20Regulations%20 2019,classification%29%20there%20must%20be%2C%20at%20any...%20More%20; ‘Regulations on
the Promotion of Zhejiang Express Industry’, China, https://www.zj.gov.cn/art/2021/10/8/art_1568565_59130210. html; and ‘Postal (Amendment) Act, 2018’,
www.china.org.cn/ china/2012-10/26/content_26911485.htm; ‘Courier Imports and Exports (Electronics Clearance) Regulation, 2010’, Government of India,
https://courier.cbic.gov.in/COURIER-IMPORTS- AND-EXPORTS.pdf; ‘Customs Act: Provisions concerning AEO (Export)’, Government of Japan,
https://www.customs.go.jp/english/aeo/laws_exporters.pdf; ‘Postal Services (Licensing) Regulations 2015’, Malaysian Communications and Multimedia Commission, Government of
Malaysia, https://www.mcmc.gov.my/en/legal/acts/postal-services-act-2012-act-741/postal- services-licensing-regulations-2015; ‘Postal Services (Post Office Rules, 1947)
(Amendment) Regulations 2020’, Malaysian Communications and Multimedia Commission, Government of Malaysia, https://www.mcmc.gov.my/en/legal/acts/postal-services-act-
2012-act-741/postal-services-post-office-rules-1947-amendment-r; ‘Postal Services (Control of Designated Postal Licensees) Regulations 2012’, Government of Singapore,
https://www.imda.gov.sg/-/media/Imda/Files/Regulation-Licensing-and-Consultations/Codes-of-Practice-and-Guidelines/ Acts-Codes/PostalServices_DPL.pdf; ‘Postal Services
(Amendment) Act 2021’ Singapore, https://sso.agc.gov.sg/acts-supp/10-2021/published/20210512?docdate=20210512; ‘Postal Service Reform Act, 2022’, USA,
https://www.congress.gov/bill/117th-congress/house-bill/3076. Voluntary disclosure’, Australia Border Force, Government of Australia, https://www.
abf.gov.au/help-and-support/voluntary-disclosures#:~:text=A%20voluntary%20disclosure%20can%20be%20made%20by%20amending,natu re%20of%20the%20errors%20and%20 the
%20relevant%20declarations.; ‘Voluntary Disclosure Programme’, Singapore Customs, https://www.customs.gov.sg/businesses/compliance/voluntary-disclosure-programme); Thailand
https://www.taxathand.com/article/20496/Thailand/2021/Voluntary-disclosure-program-for-duty-underpayments-is-available-for-five-more-years and ‘Prior Disclosure’, US
Customs and Border Protection, https://www.cbp.gov/document/publications/prior-disclosure (last accessed on May 20, 2022).
1
Figure 2.6
Key Features and Eligibility Criteria for Voluntary Disclosure Programme in Singapore and Thailand
Key Features Eligibility Criteria

Singapore The voluntary disclosure programme is • Disclosure must be complete with all the
for individuals or companies to voluntari- relevant information pertaining to the
ly come forward to disclose errors and errors and omissions,
omissions committed by them under laws
Source: Compiled by authors from KIIs, Singapore Customs • Disclosure must be made before notice
(https://www.customs.gov.sg/businesses/compliance/voluntary-disclosure-programme);
and regulations administered and enforced
Thailand ttps://home.kpmg/th/en/home/insights/2022/05/th-tax-news-flash-issue-129.html or commencement
(last accessed as onofMay
audit
20,checks
2022). and
by Singapore Customs.
investigations.
• Reforms in Allied Sectors Like Customs and those of the express delivery sector, while there are some areas
Key Features of concern. First, the Trade Facilitation Agreement (TFA)
Some Restrictions
Under the special voluntary disclosure under the WTO, which entered into force on February 22,
Thailand Importers
2017, and contains provisions will not be eligible to
forapplyexpediting
for the the
programme, importers can avoid penalties
special voluntary disclosure
that would otherwise have been imposedmovement, release and clearance of goods, including programme under the
goods
during a customs audit. following conditions:
Related to Trade Facilitation in transit, and provisions related to express shipments, is
It is also easier to settle issues comparedlikely
to • If the case is currently under investigation
to benefit the sector. The TFA sets out measures for
The growth of international trade through
normal voluntaryEDS has been
disclosure, avoiding the need by the Customs Department and/or the
effective co-operation Departmentbetween customs (DSI);
of Special Investigation and other
facilitated by the simplification of for customs
importers toprocesses
settle with individual
and customs
ports. The special voluntary disclosure
appropriate authorities on trade facilitation
• For certain customs offences (i.e., and customs
requirements in many countries. For example, countries compliance issues and contains provisions for technical
programme, therefore, provides an opportunity smuggling, importing of prohibited or
such as Australia, Singapore andfor the USA have
importers a voluntary
to manage their customs assistance and capacity restrictedbuilding in this
goods without area.
proper As of March
licence).
disclosure programme . Under
15
this, in individuals
exposures andcient manner.
a cost and time-effi- 2022, 129 WTO members (including the EU, India and its
companies are encouraged to voluntarily disclose their South Asian neighbours) have accepted the agreement.
declaration errors and omissions. Disclosure applies to all Thus, almost all developed countries, and many
types of offences under laws and regulations administered developing and least developed countries are already
and enforced by the customs department. In the USA, implementing the agreement.
prior or voluntary disclosure is part of the Informed
Compliance Program, but informed compliance is a larger Second, in the Uruguay Round and in subsequent
concept that recognises the principle of reasonable care as accessions to the WTO, 72 member countries (considering
mitigating circumstances for a company. Thailand also
16 the EU as one) have given commitments in either postal or
introduces voluntary disclosure programmes from time to courier services17 or in both.18 Of these, 14 member
time (see Figure 2.6). countries,19 mostly smaller ones, have given commitment
in both postal and courier services while 58 member
countries
2.5 Cross-Border Liberalisation: Trade
17. EDS is not recognised as a separate sub-sector and has been
Agreements and Express Delivery Services covered under postal and courier services, which is a subsector of
‘Communi- cations Services’.
Since 2010, there have been three key developments
18. https://www.wto.org/english/tratop_e/serv_e/postal_courier_e/mem-
internationally, some of which have facilitated the growth bers_postal_commitments.pdf (last accessed on March 27, 2022).
19. These include Albania, Djibouti, Gambia, Israel, Kyrgyz
15. A voluntary disclosure programme, which is a commonly used
Republic, Republic of Moldova, Mongolia, Montenegro, North
practice in the world, allows importers to voluntarily disclose
Macedonia, Senegal, Seychelles, Tonga, Turkey and Ukraine.
uninten- tional under-declared customs duty and other border
taxes.
16. US Customs and Border Protection, https://www.cbp.gov/document/
publications/prior-disclosure (last accessed on May 20, 2022).
EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS INDIA@2047 15
have given commitments only in courier services. These the universal service provider and has restrictions in the
include the EU, the USA, Canada, Middle East countries postal sector in the form of reserved area, weight and
(Jordan, Oman, Saudi Arabia, United Arab Emirates (UAE), price multiples, etc. Overall, the USA seems to focus on
Qatar and Yemen), select ASEAN countries (Cambodia, seeking liberalisation in EDS. By contrast, most of the the
Lao PDR, Philippines, Singapore and Vietnam), and some EU FTAs focus on both postal and courier liberalisation. In
other Asia Pacific countries (Afghanistan, Armenia, China, the EU- Vietnam FTA, signed in June 2020, both sides
Georgia, Kazakhstan, Kyrgyz Republic, Nepal, Russia, Samoa, have given commitments in postal and courier services.
Tajikistan and Vanuatu). Countries such as Japan,
India is now negotiating a comprehensive agreement with
Republic of Korea, India, Australia and New Zealand have
the UK, Canada, and the EU. In all likelihood, the EU will
not given any commitments in postal or courier services in
request India to liberalise this sector, making it necessary
the WTO. Thus, sector-specific commitments in the WTO
for the government to initiate discussions with industry on
are limited and the slow progress of the Doha Round has
the scope for liberalisation, their concerns and
not helped in improving commitments at a multilateral
expectations. The UK has given commitments in express
level. At the same time, the EU and countries that have
delivery services in its recent FTA with Australia (signed on
made commitments in the WTO will start their trade
December 17, 2021).22 In its trade agreements, India can
negotiations with India. Hence, this is likely to be an area
also bind the existing regime for the EDS sector, as a
of bilateral liberalisation between India and its trading
binding commitment cannot be rolled back, and this will
partners.
give a stable operating environment for foreign EDS
Third, the slow progress in the Doha Round has led to the companies in the country (see Box 2.4 for India’s
proliferation of bilateral and regional trade agreements, negotiating strategies and options). India can also work
which are considered to be future drivers of liberalisation. with partner countries to resolve trade facilitation issues.
As of March 2022, according to the data given by the In this context, India may look at the US-Korea
WTO, 354 regional and bilateral trade agreements were in agreement, which has specific provisions for expediting
force; some of these are mega-regional agreements. Some custom procedures for express shipments.
countries that have not made commitments in the WTO
have made liberal commitments in their bilateral/regional Box 2.4: India’s Negotiating Strategies and Options
trade agreements in courier/EDS. Countries, like the UK,
specifically refer to EDS while undertaking commitments.
India may not be able to undertake commitments in the postal sector as it
Many Asian countries such as Japan and the Republic of
Korea have given liberal commitments in bilateral FTAs
such as the India-Japan Comprehensive Economic
Partnership Agreement (CEPA) and the India-Korea
CEPA. India did not give commitments in postal services
and/or courier/ express services in its earlier
comprehensive agreements – the India-Japan CEPA, India-
Korea CEPA, India-Singapore Comprehensive Economic
Co-operation Agreement (CECA)
– or in the more recent India-UAE CEPA 20 and the India-
Australia Economic Co-operation and Trade Agreement,
ECTA (interim agreement).21 On the other hand, trading
partners such as Japan and the UAE have given
commitments in postal and courier services whereas the
Republic of Korea, Australia and Singapore have given 2.6 Conclusion
commitment in courier services in their respective
agreements with India. The global express delivery industry, catering to a wide
range of industries and direct consumers, has seen
The FTAs of the USA (US-Korea FTA, US-Singapore FTA,
significant growth and development. In the Asia-Pacific
and US-Australia FTA) in particular, aims to secure
region, the growth rate is higher than the global average;
extensive commitments in express delivery services and
in this region, countries such as India, which have a small
other trade facilitation issues. In the US-Korea FTA, there
market size at present, will lead growth. Regulations are
are specific provisions to ensure separate, expeditious
changing globally to support the EDS industry to
customs procedures for express shipments. At the same
develop, modernise, and
time, the USA acknowledges the need for some
restrictions for
20. The India-UAE CEPA was signed on February 18, 2022, and came
into effect from May 1, 2022. agreement was signed on April 2, 2022, and it is yet to be in effect as
21. India-Australia ECTA, an interim agreement or early harvest trade of September 25 2022.
22. The text of the agreement is available at
1 https://www.dfat.gov.au/ EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS
trade/agreements/not-yet-in-force/aukfta/o fficial-text (last
accessed on March 18, 2022).
commercialise the postal sector, and improve its efficiency consumers and businesses around the world. At the same
and productivity. Companies are bringing in investment time, the sector is labour intensive and will continue to
and new technologies, including 4IR technologies, which create jobs. The next chapter focuses on the EDS sector in
are likely to improve productivity and efficiencies, and India.
benefit
3
EXPRESS DELIVERY
INDUSTRY IN INDIA
EXPRESS DELIVERY INDUSTRY

IN INDIA
India was one of the fastest growing economies in the

3
Infrastructure 52nd 20th 41st 47th 40th
world prior to the COVID-19 pandemic. According to the (Rank)
International Monetary Fund (IMF), 23 India was ranked the Infrastructure 2.91 3.75 3.14 3.01 3.15
sixth largest economy in the world in 2021, after the USA, (Score)
China, Japan, Germany and the UK, and was followed by
International 44th 18th 25th 49th 32nd
France (7th), Italy (8th), Canada (9th) and the Republic of Korea Shipments
(10th). While the growth rate had dipped during the (Rank)
pandemic, India is projected to be on a V-shaped recovery International 3.21 3.54 3.46 3.16 3.35
and the NITI Aayog, Government of India, has set a target Shipments
of becoming a USD17 trillion-dollar economy by 2047. (Score)
International bodies like the IMF and the World Bank have Logistics 42nd 27th 32nd 33rd 36th
also projected a fairly high growth rate for India (see Competence
Chapter 4). (Rank)
To reach this high growth target, there is need for fast- Logistics 3.13 3.59 3.41 3.40 3.30
Competence
track reforms, reduction in logistics costs and time, and
(Score)
exponential growth in both domestic trade and
international trade. In the World Bank’s Logistics Tracking & 38th 27th 33rd 34th 47th
Tracing (Rank)
Performance Index (LPI), India has improved its overall
ranking since 2010 – from 47th in 2010 to 44th in 2018 but it Tracking 3.32 3.65 3.47 3.45 3.15
was still behind other developing countries in 2018 (see & Tracing
(Score)
Table 3.1). In logistics competence and infrastructure,
India is still far behind China (see Table 3.1). This is due to Timeliness 52nd 27th 28th 40th 53rd
(Rank)
the high logistics cost of around 13 per cent in India of the
gross domestic product (GDP), compared to about 9 per Timeliness 3.50 3.84 3.81 3.67 3.46
cent in China and 8 per cent in the USA and in the EU.24 (Score)
Therefore, addressing logistical inefficiencies and cost will Source: Compiled by authors from Logistics Performance Index:
be a key determinant of India’s growth in the near future. Global Ranking – 2018, the World Bank, available at
https://lpi.worldbank.org/international/global (last accessed
on May 25, 2022).
Table 3.1
India’s Comparative Ranking among Select Developing Countries Note: The rank is based on 160 countries in 2018.
in the World Bank’s Logistics Performance Index 2018
At the same time, reforms in India, like the path-breaking
Indicators India China Thailand Vietnam Malaysia
introduction of the GST, or the corrections in inverted
LPI (Rank) 44th 26th 32nd 39th 41st duties for trade, have facilitated the growth of domestic
LPI (Score) 3.18 3.61 3.41 3.27 3.22 businesses and international trade. For example, India’s
Customs trade in goods is growing at a faster pace as compared to
40th 31st 36th 41st 43rd
(Rank) the global trade in goods. In 2005, India’s trade in goods
Customs 2.96 3.29 3.14 2.95 2.90
was valued at USD241 billion and in 2020, it increased to
(Score) USD648 billion (WTO, 2005 and 2021). Between 2005 and
2020, India’s trade in goods has increased at a CAGR of
6.8 per cent compared to the CAGR of 3.3 per cent in
23. Compiled from Data extracted on ‘GDP, current prices (Billions
global trade in goods.25 India’s contribution to the global
of U.S. dollars) ‘World Economic Outlook’, April 2022, available trade in goods has increased from
at https://www.imf.org/external/datamapper/datasets/WEO (last 1.1 per cent in 2005 to 1.8 per cent in 2020. Yet, India’s
accessed on May 25, 2022). share
24. https://timesofindia.indiatimes.com/blogs/voices/the-curious-case-of- in goods trade was much lower than that of many other
rising-logistics-costs-explained/ (last accessed on May 25, 2022).
25. Own calculations from WTO (2005 and 2021). 1
Asian countries such as China (13.5 per cent), Japan (3.7 per international express delivery. The domestic express
cent), the Republic of Korea (2.8 per cent) and Singapore industry contributed around 77 per cent and international
(2 per cent) in 2020 (WTO, 2021). express accounted for the remaining share of 23 per cent
The express delivery industry can play a pivotal role in in 2016- 17 in the revenue of Indian express industry (see
facilitating India’s economic growth and achieving the Figure 3.2). The KIIs confirmed that the express industry
target of USD17 trillion by 2047. The sector has significant does not foresee any major changes in the market size of
backward and forward linkages, from creating jobs to the two segments by the year 2047. During the COVID-19
connecting Indian SMEs to global value chains to giving pandemic, with disruptions in international trade, the
Indian consumers a wide range of products at their domestic market was the key driver of growth for this
doorsteps. With globalisation, the gradual removal of sector, and the share went up to 80 per cent. However, by
barriers to trade, speed of delivery, and end-to-end 2047, it will be 75 per cent domestic express and 25 per
management of shipments in transit have evolved as the cent international express (see Figure 3.2), with
most important determinants of efficiency and international trade growing due to trade liberalisation
competitiveness of industries for which it has to rely through trade agreements, more and more SMEs being
heavily on express delivery providers. Today, India is connected to global value chains through e-commerce
about 2 per cent of the global market for express delivery platforms, etc.
and the sector’s share in logistics is also much less
compared to that in developed countries and some high Figure 3.1
growth markets. Therefore, it is important to understand Revenue of Indian Express Delivery Industry
the market size of this sector, its strengths and how this 6 5.5
sector can play a key role in helping India achieve its
5
growth targets under ‘Vision India@2047’.
4
Section 3.1 examines the size of the Indian EDS sector 3.4
and the likely size of the market in 2047 based on the 3
USD
KIIs. It also examines EDS by the different modes of 2 1.7

1.6
transportation, and the contribution of different segments
like B2B and B2C to the revenue of the EDS industry in 1
India. Section 3.2 presents the structure of the Indian 0
EDS industry. Section
3.3 looks at some new developments in the sector that 2005 2012 2017 2020
Year
can be drivers of future growth.
Source: Compiled by authors from the data provided by CARE
(2006), Deloitte (2018), Khatri (2022) and KIIs.
3.1 Size of Indian Express Delivery Industry
Note: Data is given for financial year starting from April to
March.
In 2020, the revenue of the Indian express delivery
industry increased to USD5.5 billion; from USD1.6 billion in
Figure 3.2
2005 (see Figure 3.1). Between 2012 and 2020, the Indian
Contribution of Domestic and International Express
express delivery industry has grown at a CAGR of 15.8 per
to the Revenue of the Indian Express Delivery Industry
cent.26 However, with the implementation of the GST,
in 2016-17 and 2047
growth of e-commerce, etc., the sector has been
developing rapidly
and industry estimates show that the growth rate of the A. 2016-17 B. 2047
express industry is now more than double or 2.5 times the International International
nominal GDP growth rate. 23% 25%
As shown in Chapter 2, the Asia-Pacific region is one of
the fastest growing markets and in this region, India is one
of the fastest growing markets for the express delivery
industry. However, the market size is small and there is
immense potential for growth.
3.1.1 Contribution of Different Segments:

Domestic and International
Domestic Domestic
Depending on the origin and destination of delivery, the 77% 75%
Indian express industry can be divided into domestic and
26. Authors’ calculation based on figures as shown in Figure 3.1 for
years 2012 and 2017. Source: Compiled by authors from the data provided by Deloitte 2
(2018) and KIIs.
3.1.2 Share by Different Modes of Transportation

there is tremendous scope for increasing international
The entire international transport of the Indian EDS trade through the air cargo mode.
industry is through air. For domestic transportation, both
air and road transport are used. As of May 2022, there Figure 3.3
Contribution of Different Modes of Transportation to the
was hardly any EDS through the railways. In 2016-17,
Revenue of the Indian Express Delivery Industry in 2016-17 and
surface express contributed about 55 per cent whereas air
2047
express, including domestic air express and international
air express, A. 2016-17 B. 2047
contributed 45 per cent to the revenue of the Indian Air Express Road
express delivery industry (see Figure 3.3). In the domestic 45% 40%
express industry, surface express industry contributed
around 71 per cent and air express had the remaining
share of 29 per cent in revenue in 2016-17 (Deloitte,
2018). This is primarily because air express is four times
more expensive than surface transport (Khatri, 2022). The
express industry pointed out that, as of date, air transport
takes the bulk (almost 60-65 per cent) of high value cargo,
while road transport has higher volumes. The domestic air
express B2B segment is also used by corporates to deliver Air Express
materials that are extremely
time sensitive or perishable in nature. Hence, it is typically Surface Express 50% Railway
used by specific industries such as pharmaceuticals, 55% 10%
medical
equipment, electronics, engineering, auto-components introducing high speed dedicated trains and roll-on-roll-off (RORO)
all over the country, the share of the railways could be more than 10
(spare parts for after sales requirements), life style products,
per cent by 2047. However, we have taken 10 per cent as that was
etc., where shipments are highly time sensitive. The the share given by 90 per cent of the respondents.
average time of delivery of goods is one to two days,
depending on the location or sector. The industry opined
that there is scope for the use of railways, especially fast
trains, for long haul cargo in the future, but its share is
not expected to be more than 10 per cent in 2047, 27 which
means that air transport will continue to have a 50 per
cent share (domestic and international) and surface
transport an equal share, of which road transport will
account for 40 per cent (mostly domestic, may be some
international with neighbouring countries) and railway
around 10 per cent (mostly domestic and long-haul cargo)
(see Figure 3.3).
In the case of air transport, a large part of express
delivery cargo is carried in the belly of passenger airlines.
The express industry players also have their own cargo
airlines. One study shows that around 20 per cent of the
total domestic air cargo is transported as dedicated cargo
while the remaining 80 per cent is transported in the belly
of the passenger airlines in India (Khatri, 2022). In
addition to collection, transport and delivery, express
delivery providers also assist in customs clearances and
other regulatory procedures for international express. In
India, all international shipments are delivered by air. In
2016-17, international air express contributed around 23
per cent in the revenue of the Indian express delivery
industry (see Figure 3.2), which is low, compared to
countries such as China or ASEAN member countries and
27. During the KII, express companies pointed out that if the govern-
ment amends the Railway Act, 1989, and initiates other measures
such as building dedicated freight corridors (DFCs), and
Source: Compiled by authors from the data provided by Deloitte 2
(2018), Khatri (2022) and KIIs.
The constituents of international air express are inbound

express and outbound express. Inbound shipments
consist mainly of samples, industrial goods components,
auto- component spare parts, consumer goods,
pharmaceuticals, etc. The growing aerospace industry in
India is also a key consumer of express services and is
expected to drive growth going forward. Outbound
shipments consist mainly of finished and intermediate
goods such as apparel, leather, handicraft, and gems and
jewellery. During the KII, express delivery companies
pointed out that large players contribute about 70 per
cent while medium and small players account for the
remaining share of 30 per cent in the revenue of
outbound express.
Domestic express services are used for delivering
documents such as credit cards, debit cards, cheques,
government documents such as passports as well as
non-document packages consisting of machine spare
parts, electronic items, garments, imitation jewellery,
return goods and others. With increasing digitisation, the
industry is moving away from a document versus non-
document classification to a weight-based classification.
Around 50 per cent of the total shipments of domestic
surface weigh less than 2 kg, 30 per cent weigh between
2 to 5 kg and the remaining 20 per cent weigh more
than 5 kg (Deloitte, (2018). By 2047, the KIIs believe
that much of the documents will be digitalised and,
therefore, growth may slow down but there will be
double- digit growth of movement of other products and
through e-commerce businesses.
Among different segments, such as B2B, B2C, C2C and
G2C, the B2B segment is the dominant segment;
however, in the last few years, there have been
dramatic changes in the
B2C segment, which is now growing at a much faster rate Figure 3.5
than the B2B segment although B2B shipments continue User Industries of Indian Domestic Surface B2B Express Delivery
to contribute the major share of revenue of the Indian Services in 2019-20
express delivery industry. In 2016-17, the B2B segment Auto
contributed
about 60 per cent to the revenue of the express delivery Others
Components
16%
industry of India while B2C shipments contributed about Electronics
15%
37 per cent with the remaining 3 per cent coming through 5%
C2C28 shipments (see Figure 3.4). Chapter 4 examines the Pharmaceuticals,
likely changes in growth across these different segments Electricals 6% Healthcare and
Chemicals
by the year 2047 under different scenarios. Fast Moving
14%
Consumer
Figure 3.4 Goods and
Durables (FMCG
Contribution of Different Segments to the revenue of Indian
and FMCD) Engineering
Domestic Surface Express in 2016-17 8% 13%
C2C E-commerce/
3%
Retail Apparel and
10% Lifestyle
13%
B2C
37% Source: Compiled by authors from the data provided by Khatri
(2022) and KIIs.
B2B
• B2C Segment (E-Commerce) – the Fastest
60% Growing Segment
The tremendous growth of e-commerce has led to the
growth of the B2C segment, with the e-commerce sector
contributing more than 70 per cent to the B2C revenues,
followed by banking, financial services and insurance, and
Source: Compiled by authors from the data provided by Deloitte other document deliveries belonging to the education,
(2018) and KIIs. telecommunication or government and public services
sector. This segment is expected to grow the fastest by
• The B2B Segment – The Dominant Segment 2047.
In India, domestic surface B2B segment has large volumes Increasing internet and smartphone penetration, rise in
as compared to the air B2B segment. Different studies digital payments, the convenience of shopping from home
have projected the growth of this segment. For example, or office, the ability to compare price and quality along
according to Khatri (2022), the B2B surface express with the recent pandemic related restrictions on physical
segment was valued at USD1.75 billion in 2020 and is mobility, and the popularity of ‘Make to Order’29 has led to
expected to reach USD3 billion by 2025 (a CAGR of 15 per the rise in e-commerce, globally and in India. In 2020, the
cent). The major user industries of surface B2B segment turnover of the Indian e-commerce industry was valued at
are presented in Figure 3.5. Pharmaceuticals and auto USD46.2 billion; more than thrice the USD14 billion
components have been major contributors to the Indian turnover in 2014 (see Figure 3.6). Between 2014 and
express delivery industry from the beginning. On the other 2020, the Indian e-commerce industry has grown at a
hand, industries that have very high-volume, low-value CAGR of 22 per cent. The revenue of the Indian e-
products that have not traditionally used express commerce industry is expected to reach USD188 billion by
distribution (such as the FMCG and fast-moving consumer 2025, and USD350 billion by 2030 (India Brand Equity
durables (FMCD)) have now started using this mode. Foundation (IBEF), 2022).
28. The C2C shipments include parcels shipped by individuals across

29. Make to Order is a business manufacturing approach wherein pro-
the country for business or personal use. The C2C segment has
duction is commenced only on the receipt of a confirmed order
high margins; however, growth is constrained by low demand and
from the customer. It entitles the customers to buy personalised
high marketing investment.
items that fit their unique requirements. This is mainly used for
automobiles, aircraft, computers, medical devices and marine
vessels. 2
Figure 3.6 First Flight Couriers Ltd. started operations between 1982
Revenue of and Projections for the E-commerce Industry in India –
and 1985. FedEx Corporation started its operation in India
A Key Driver of B2C Business Growth for EDS
in 1984.31 Some of these companies had tie ups with
400 integrators like DHL, FedEx and UPS. TNT started its
350 services in India in 2006.32 Safeexpress and Gati were
350
300 among the early express delivery companies which started
distribution by surface mode. Blue Dart introduced
250
domestic express freighters for the first time in India in
200 188
1995. As market size and scope for growth kept on
USD
150 increasing, other players such as TCI Express entered the

100 market.
50 39 46.2
14 20 21.9 Even today, the Indian express delivery industry is highly
0 fragmented with more than 1000 active players; divided
2014 2015 2017 2018 2020 2025E 2030E
between around 20 large players (some of whom are in
Year
international businesses), many mid-sized regional and
Source: Compiled by authors from the data provided by Statista niche companies (Shree Maruti Courier Pvt. Ltd., etc.), and a
Research Department (2022), IBEF (2022) and KIIs.
number of start-ups and small and medium-sized companies.
Note: E- Estimate. Most players in the domestic express business are home
grown but over time, some of them have been acquired by
The KIIs found that as the e-commerce industry grows,
global logistics players. For example, in 2005, DHL
the B2C express services is bound to grow as committed
acquired an 81 per cent stake in Blue Dart, which was
turnaround times, from order to receipt of product, is the
pared down to a 75 per cent stake in 2012.33 Large players,
most critical factor for buyers. Any delay in delivery leads
having operations across India (through their network
to cancellation of orders. Therefore, there is need for
partners) and internationally, constitute 75 per cent of the
timely deliveries with the ability to track the consignment,
Indian express delivery market while medium and small
which EDS provide. EDS provides not only delivery but
players constitute the remaining 25 per cent (Khatri, 2022).
also services like return consignments, with accurate on-
time pick-ups. The growth of e-commerce has also led to Many start-ups like Delhivery, Ecom Express Limited and
the penetration of the EDS sector in products like food and Xpressbees are providing end-to-end logistics services,
grocery and healthcare. The other key development including express services, and are emerging as important
related to e-commerce is that e-commerce players are players alongside global companies like DHL and FedEx.
building a network of distribution centres to optimise
logistic costs. They want fast-track surface express, like
3.2.1 Speed Post
long haul railways, which, unlike in many other countries,
is not used at present as an express delivery mode in India Post (Department of Posts) has one of the largest
India. They also want better multimodal connectivity, and domestic networks of 1.5 lakh post offices and the highest
the EDS industry is trying to provide the same. coverage of pin-codes throughout the length and breadth
of the country, including remote and inaccessible regions.
3.2 Structure of Indian Express Delivery Industry It provides domestic and international express services.
However, at present, the express segment (national and
The Indian express industry started in a very unorganised international) contributes to a small share in the revenue
way since independence, where traders used to send of India Post and the revenue as presented in Table 3.2
urgent and high value cargo to destination by shows a fluctuating trend.
‘angadias’30. The India Post’s international tie-ups and collaboration are
advent of the organised express delivery industry in India
can be traced back to the late 1970s and early 1980s. As 31. https://newsroom.fedex.com/newsroom/fedex-express-to-acquire-ex-
trade and industry grew, and India started opening up the press-company-in-india/#:~:text=FedEx %20Express%20began%20
economy, the need for organised courier services was felt. operating%20in%20India%20in%201984.,an%20all%20cargo%20
flight%20in%20India%20in%201997%3B (last accessed as on July 1,
One of the earliest organised EDS was the Speed Post
2022).
service of the Government of India in 1980. At the same
32. https://common.tnt.com/corporate/en/data/press/2006/02/401269T-
time, a few international express companies like DHL and NT_launches_domestic_Express_services _in_India.html#:~:text=T- NT
domestic companies started operating in India. DHL %20launches%20domestic%20Express%20services%20in%20 India
started operation in the year 1979 and Indian companies %20Publish,India%20at%20a%20press%20meeting%20in%20 Mumbai
%20today (last accessed as on July 1, 2022).
such as SkyPak, Elbee, Blue Dart, Desk Courier & Cargo
(DTDC) and 33. https://bluedart.com/blue-dart-dhl-relationship (last accessed as on
July 1, 2022).
30. Someone who carries high value cargo with him in person.
Table 3.2
Year-Wise Contribution of Express Mail in Total Revenue of Department of Posts (India Post)
Financial Year Revenue from Express Mail (INR Billion) Total Revenue (INR Billion) Share of Express Mail in Total Revenue (%)
2015-16 16.1 129.4 12.4
2016-17 17.8 115.1 15.5
2017-18 18.3 130.8 14.0
2018-19 19.2 134.8 14.3
2019-20 17.6 135.6 13.0
2020-21 16.2 106.3 15.2

2021-22 (April
12.6 84.5 14.9
to Dec 2021)
Source: Compiled by authors from Various Annual Reports of Department of Posts, available at https://www.indiapost.gov.in/Vas/pages/AboutUs/
AnnualReport.aspx (last accessed January 6, 2022).
through different agreements such as the Postal Services

3.2.2 Collaboration between Private EDS Companies &
Data Sharing Agreement or the PRIME USPS Tracked
Transport – An Example of Collaboration between the
Service Agreement with USPS, which are presented in Box
Ministry of Railways and Gati-KWE
3.1.
High speed trains, for both passenger and cargo, can be used
Box 3.1: International Tie-Ups and Collaborations – India Post for express delivery services in India as in other countries.
This will also be environment friendly. For this, there is
need to have loading and unloading facilities on the
platform, which is already envisaged under the Vande
International Money Transfer - Western Union Bharat Gati Sakti train. The Indian Railways is
The service enables instant international money remittance to customers in India sent from
collaborating witharound
Gati- 195 countries
KWE for on a real time basis.
transporting goodsIndia Post wa
through parcel trains. 34
Postal Services Data Sharing Agreement

India Post has started exchange of electronic data of international postal items prior to their physical arrival at the destination with more than 12
3.3 Recent Developments and Key Growth
PRIME USPS Tracked Service Agreement with USPS Drivers of the Indian Express Delivery Industry
India Post has finalised acceding to the PRIME USPS Tracked Services Agreement in October 2021 with USPS. This will enable exchange of tracked pac
Source: Compiled by authors from the Department of Post (2022)
A number of factors like the growth of e-commerce,
digitalisation, implementation of the GST, the emphasis on
transport and logistics development through the PM Gati
Shakti - National Master Plan for Multi-modal Connectivity
and National Logistics Policy, 2022, the drive towards
trade facilitation and automation of customs clearances
are key drivers for the growth of this sector. The ECCS
interface has been implemented at leading international
terminals. This facilitates faster customs clearance and
inspection procedures and is expected to lead to higher
efficiencies in international express. Many global e-
commerce companies such as eBay Inc. and Amazon.com
Inc. are sourcing from Indian MSMEs, and EDS will play a
key role in connecting the Indian MSME sector to global
markets. Indian exporters are also able to sell directly on
the platform under the marketplace-based model.
Inbound trade has also grown due to the increase in the
exposure of Indian consumers to global products and
brands. Some examples of recent developments in the
Indian EDS sector are given in Box 3.2.
34. https://www.gatikwe.com/our-services/transportation-services/ (last

accessed on May 20, 2022).
Box 3.2: Some Recent Development in Indian EDS
Parcel Lockers
To ease the collection of consignments for customers, many express delivery companies are setting up automated/parcel lockers. These lockers enable
Air Dedicated Freighter/Carrier
In India, Blue Dart was the first company with dedicated air freighter/carrier for cargo in 1995. Now an emerging express company, SpiceXpress, also h
Source: Compiled by authors from Khatri (2022); https://entrackr.com/2020/03/india-post-launches-free-digital-locker-facility/; and https:// api.bluedart.co
The next chapter examines different growth scenarios for the EDS sector.
4
GROWTH PROJECTIONS OF
EDS SECTOR UNDER
DIFFERENT
SCENARIOS
4
GROWTH PROJECTIONS
OF EDS SECTOR UNDER
DIFFERENT SCENARIOS
This chapter projects the growth of the EDS sector in India followed by the remaining big countries such as China (4.4
under different scenarios, taking into account the growth per cent), the USA and the UK (3.7 per cent), France (2.9
and development objectives of the Indian government. per cent), Japan (2.4 per cent) and Germany (2.1 per cent).
It predicts that by 2027, India will be the world’s fourth
4.1 Indian Economy’s Vision of Becoming a largest economy, with a GDP of about USD 5.53 trillion
(after China, the USA, Japan) and surpass Germany (5 th) and
USD17-Trillion Economy – Some Key
the UK (6th).39 While growth had slowed down during the
Growth Drivers pandemic, the country is projected to have a V-shaped
In 2047, India will celebrate the 100th year of recovery. Based on discussions with policymakers and the
independence. The NITI Aayog, Government of India, industry, there are five pillars that will support growth in
has predicted that the Indian economy will become a the next two decades. These are presented in Figure 4.1
USD17-trillion-dollar economy by then. This is on the and discussed below.
back of several structural changes/reforms, which have a. Thrust towards Development of Logistics
taken place since 2014, including the fast pace of Infrastructure: India’s recent focus on infrastructure
infrastructure development, socio- economic development spending including industrial infrastructure, urban
(including focus on agricultural reform), improvement in infrastructure, logistics and multimodal connectivity
economic productivity (including manufacturing is critical to putting the economy on a path of
competitiveness), streamlining the logistics and supply sustained growth. The government’s focus on
chains and digital initiatives to drive growth. In 2014, infrastructure creation is likely to have a significant
when Honourable Prime Minister Shri Narendra Modi multiplier effect on economic growth. Through the
began his first term, India was the world’s tenth largest National Infrastructure Pipeline and National
economy. In the following seven years, it grew by 40 per Monetisation pipeline, the government is focusing
cent; among the big economies, only China did better, on attracting investments for critical infrastructure
with 53 per cent growth over the same period.35 India has projects. It set up the National Bank for Financing
now become the fifth largest economy in nominal terms Infrastructure and Development (NBFID) to
(USD854.7 billion) behind the USA, China, Japan and mobilise funding for large- scale infrastructure
Germany; it surpassed the UK36 and became the world’s investments and ‘PM Gati Shakti
third-largest economy in purchasing power parity terms, - National Master Plan for Multi-modal Connectivity’,
with a GDP of USD10 trillion, behind China (USD 27 which was launched in October 2021 aims to
trillion) and the USA (USD 23 trillion).37 ensure a more holistic development of
infrastructure. In addition to these, the dedicated
According to the IMF’s World Economic Outlook (April
rail freight corridors will help meet the increasing
2022),38 Indian economic growth is projected to be the
demand for passenger and freight traffic across
highest at the rate of 8.2 per cent in the world in 2022,
several critical routes. The Regional Connectivity
35. https://www.economist.com/briefing/2022/05/14/india-is-likely-to-be- Scheme (RCS)-UDAN, launched in October 2016,
the-worlds-fastest-growing-big-econo my-this-year (last accessed on will help improve regional air connectivity, both for
May 25, 2022). domestic passengers and commercial cargo.
36. https://www.indiatvnews.com/business/news/india-world-s-fifth- Further, the development of inland waterways and
largest-economy-beats-uk-2022-09-03-805005 (last accessed on its use for critical trade routes will provide an
September 30, 2022); and https://www.news18.com/news/business/in-
dia-becomes-5th-largest-economy-in-the-world-beats-uk-to-seal-spot- impetus for industry to use alternate, greener and
know-details-5879599.html (last accessed on September 30, 2022). cheaper modes of transport. The creation of the
37. https://economictimes.indiatimes.com/news/economy/indicators/india- physical infrastructure under the ‘PM Gati Shakti -
retains-its-position-as-3rd-largest-economy-on-ppp-basis-for-2017/ National Master Plan for Multi-modal
articleshow/76532262.cms (last accessed on May 30, 2022).
38. The report is available at https://www.imf.org/en/Publications/WEO/
Issues/2022/04/19/world-economic-outlook-april-2022 (last accessed 39. https://www.newindianexpress.com/business/2022/may/22/usd-5-
on May 30, 2022). trillion-economy-the-curious-case-of-indias-rise-to-the-top-5-2456444.
html#:~:text=The%20IMF%2C%20which%20predicted%20in%20April
%20this%20year,trillion%20economy%20in%20FY28%20or%20calen- 2
dar%20year%202027 (last accessed on May 30, 2022).
Figure 4.1
Five Pillars with Examples to Support Future Growth
Drivers of India’s Vision of 17 Trillion Dollar Economy by 2047
Infrastructure Demand Driver Skilling Technology Structural
Integrated Infrastructure Consumption Driven Growth and Inclusive Demand Skilled Manpower to Drive Economic Growth
and Network Planning and Development
PM Gati Shakti Master Plan for Multi-modal Connectivity Rapid Urbanisa- tion (40% by 2030) India’s Vibrant Demography of Working
Dedicated Freight Corridors Rising Income Levels and Growth in Tier 2 and Tier 3 Cities andCapacity
Towns Building Commission for Capac
Air Frieght Volumes & Udaan RCS Linkage with Regional and Global Value Chains Skill India
Single Market Owing to GST
Technology Driven Growth Industrial Growth including Shift to Renewables
E-Governance PLI Scheme

JAM Trinity Entry of Big Firms and Big Business Houses Investing in Key Sectors
UPI (National Payment System) National Industrial Corridors
Shift to Greener Modes/Renewable Energy
Source: Compiled by Authors based on Government of India initiatives and KIIs.
Connectivity’, the National Logistics Policy, 2022, important determinant of national economic growth
and the creation of a single national market and poverty reduction. According to Government of
through the introduction of the GST are critical India estimates, urbanisation is expected to reach 40
reforms that are enablers for the development of per cent by 2030.40 Cities are the engines of growth
the logistics sector. and are driving demand for a range of consumer
goods and other products. Indian consumers, like
b. Demand Driver: India is one of the world’s largest
consumers elsewhere in the world, are moving on to
markets with 1.3 billion population and a growing
e-commerce platform and are buying more, both
middle class. Urbanisation in India has become
from within their own country and outside. The
an important and irreversible process, and it is an
turnover of the Indian e-commerce industry has 2
million), after China and the USA in 2020.41 This
reached USD30 billion; more than double the shift in consumer behaviour provides Indian SMEs
USD14 billion in 2014 (as pointed out in Figure 3.6 and entrepreneurs with new opportunities to sell
in Chapter 3). India has the third largest online their products or services to a much bigger
shopper base (140 international market through e-commerce
platforms. The Indian government has also
40. https://www.firstpost.com/india/40-indans-likely-to-live-in-urban- launched the Open Network for Digital Commerce
areas-by-2030-says-hardeep-singh-puri-8725381.html; and https://
timesofindia.indiatimes.com/blogs/A-brick-on-the-wall/budget-2022-is-
(ONDC), a public digital infrastructure, as a key
expected-to-push-for-planned-urbanisation/ (last accessed as on June initiative to democratise e-commerce, increase
1, 2022). competition from small players, eliminate the
dominance of large players, and increase e-
commerce penetration to 25 per cent from the
current 8 per cent of India’s population over the
next two years. As pointed out in Chapter 3,
increasing internet penetration, rise in digital
payments and smart phones, the convenience of
shopping from home or office, the ability to
compare price and quality along with the recent
pandemic related restrictions on physical mobility
have led to the rise in e-commerce, globally and in
India. At the same time, B2B e-commerce is
growing. With the shift in demand for
manufactured parts and components in emerging
markets and the increasing role of India in global
value chains through initiatives such as the Japan
Australia and India Supply Chain
41. https://www.bain.com/insights/how-india-shops-online-2021/ (last

accessed as on June 1, 2022).
Resilience Initiative (SCRI), India can tap into regional the Government of India has taken an integrated
and global value chains to develop further view of the Indian logistics value chain to develop
capabilities and move up the value chain. This will a unified system by interconnecting the IT systems
help hone skills in new concept development, of various union ministries, state departments,
research and development (R&D), or in the governing bodies, and private service providers. For
manufacture of key parts and components, and in stakeholders to receive logistics-related services,
downstream activities such as marketing, branding, visibility, authorisations, and certifications of cargo
or customer service. Such activities involve tacit, seamlessly, all IT systems need to be interconnected.
non-codified knowledge in areas such as original The Unified Logistics Interface Platform (ULIP) is
design, creation, and management of cutting-edge designed to enhance efficiency and reduce the
technology and complex systems. This will help cost of logistics in India by creating a transparent,
further India’s exports and is a demand driver. one-window platform that can provide real time
c. Skilled Manpower: India has one of the youngest information to all stakeholders. These are being
populations in the world – more than 50 per cent of used by industry players, including start-ups, for
its population is below the age of 25 and more than various important use cases in the logistics sector,
65 per cent below the age of 35. The average age including tracking and tracing of cargo. These start-
of an Indian is 28.7 years compared to 38.6 years ups range from e-commerce to food delivery
in the USA, 38.4 years in China, 40.6 years in the companies, companies with expertise in drone and
UK and 48.6 years in Japan (figures pertain to the geographic information system (GIS) maps, and
year 2022).42 This means India has great potential ride-sharing services, which have helped solve
to contribute to the demand for labour and human several market imperfections and helped improve
capital and the government’s efforts towards both producer and consumer welfare. These start-
skilling people in the working age group will help ups will help boost e-retail, B2B trade and
increase the country’s labour force to meet consumerism. It will help make businesses more
industrial needs. Some key initiatives like the efficient and competitive in global markets.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and Furthermore, government process re-engineering
the Pradhan Mantri Kaushal Kendra (PMKK) are using IT or e-governance is now being adopted
ensuring that a large number of Indian youths take by both the central and state governments; the
up industry-relevant skill training that will help recent COVID-19 pandemic has fast tracked
them secure better livelihoods by establishing state- the process of e-governance. India has made
of-the-art, visible and aspirational model training great strides in e-governance, which has steadily
centres in every district of India. In addition to evolved from the computerisation of government
ensuring skilling of the potential labour force for ministries/departments to interdepartmental digital
gainful employment and supporting the private and connectivity to initiatives that encapsulate the finer
public sector, the National Programme for Civil points of governance, such as citizen centricity,
Services Capacity Building (NPCSCB) – Mission service orientation and transparency. There are
Karmayogi – aims to create a competent civil several national as well as sub-national initiatives
service rooted in the Indian ethos, with a shared that help improve government service delivery. For
understanding of India’s priorities, working in example, e-seva in Andhra Pradesh is designed to
harmony for effective and efficient public service provide ‘government to citizen’ and ‘e-business to
delivery. This will support India’s vision for robust citizen’ services.44 All services are delivered online
and sustainable growth. to consumers/citizens by connecting them to the
d. Technology. The fourth pillar is the IT driven growth respective government departments and providing
story – a combination of India’s engineering skills, online information at the point of service delivery.
mobile data and a national technology stack, which The project has become very popular among
has made India the third largest start-up hub in the citizens, especially for the payment of utility bills. At
world, after the USA and China. 43 More recently, the national level, DigiLocker serves as a platform
with the focus on improving logistics efficiency in to enable citizens to securely store and share their
the country through the National Logistics Policy, documents with service providers who can directly
2022, access them electronically. The implementation of
the Jan Dhan Yojana, Aadhaar and mobile number
42. The data is extracted from Country Comparison – Median Age, The
World Factbook, available at https://www.cia.gov/the-world-factbook/
field/median-age/country-comparison (last accessed as on June 1, show/85871428.cms (last accessed on June 1, 2022).
2022).
43. https://timesofindia.indiatimes.com/business/india-business/in-
dia-becomes-third-largest-startup-ecosystem-in-the-world/article-
44. E-seva in Andhra Pradesh was started in 1999. The details are 3
available at https://www.financialexpress.com/archive/e-seva-
the-citizen-friendly- face-of-e-governance/92827/; and
https://services.india.gov.in/service/ detail/e-seva-portal-for-
online-citizen-services-of-andhra-pradesh (last accessed as on
June 1, 2022).
(JAM) trinity to link Jan Dhan accounts, mobile 47. https://www.financialexpress.com/economy/how-manufacturing-sec-

tor-drives-economic-growth/2122128/ (last accessed on June 1,
numbers and Aadhaar cards of Indians was one of 2022).
the biggest reforms in India to transfer subsidy
48. WTO (2021).
directly to the bank accounts of Indians. This also
helped create a credible robust structure through
which banking and financing facilities could reach
people.
Last but not the least, the emergence of fintech has
made banking much more accessible and
convenient. Physical banking has been replaced to
some extent by digital and phone banking, which is
accessible for all. The adoption of technology for
banking and payment through apps has made real
time fund transfer quick and hassle-free. One such
application is the Unified Payments Interface (UPI).
In 2021, there were 3800 crore UPI transactions
valued at INR73 lakh crore. 45 Since it was first
launched in 2016, UPI transactions have grown
over 76 per cent on a year-on-year basis.46 This has
helped fuel growth in the economy and will be a
critical pillar for India to leapfrog ahead.
For international trade, the Indian customs has
already implemented online document submission
process and customs and allied clearance agencies
are implementing technology-based risk
management systems (RMS). Technology can help
connect customs to allied agencies, laboratories,
etc., and reduce the need for physical inspection
and consequent delays.
e. Structural Change with Focus on Renewable Energy:
India’s manufacturing competitiveness has
remained subdued. The share of manufacturing
share in total output has remained stagnant at 17-
18 per cent over the past decade as corporate
investment has remained in the range of 9-12 per
cent of the GDP.47 The country accounts for only 1.6
per cent of the global exports of goods.48 However,
since 2014, the government has made efforts to
increase investment and trade liberalisation,
integrate MSMEs in global value chains and
initiated skilling programmes, and develop
industrial corridor to attract large investments. It
has also initiated schemes like the PLI Scheme to
incentivise companies to scale-up and attract
foreign investment in select sectors like solar
panels, batteries and pharmaceuticals. India’s
logistics sector reforms, infrastructure investments
and integration into regional and global value
chains will help reduce logistics costs and improve
India’s
45. https://timesofindia.indiatimes.com/business/india-business/upi-trans-
actions-hit-a-new-record-in-december -2021/articleshow/88637487.
cms (last accessed on June 1, 2022).
46. https://timesofindia.indiatimes.com/business/india-business/upi-trans-
actions-hit-a-new-record-in-december -2021/articleshow/88637487.
cms (last accessed on June 1, 2022).
manufacturing capabilities and exports. Many big 54. https://indianexpress.com/article/business/india-uae-sign-trade-pact- 3
agreement-7780209/ (last accessed on June 1, 2022).
Indian companies such as Adani Enterprises
Limited, Reliance Industries Limited (RIL), Tata
Group and JSW Group have responded positively
to these incentives. These four companies are
planning to invest more than USD 250 billion over
the next five to eight years in infrastructure
and emerging industries to develop local supply
chains, which fit in with government goals.49
Moreover, Indian companies are now willing to
invest in renewable energy and shift to greener
modes of transport such as energy efficient
vehicles like battery operated trucks. For
example, in 2020, Tata Motors launched its first
commercial electric truck, Tata Ultra T.7, in the
Indian market.50 The company is also planning to
introduce 10 new electric vehicles by 2025.51
Other global companies such as Daimler Truck
AG, Germany, are also planning to introduce their
first electric trucks soon. These electric trucks will
help reduce infrastructure/ logistics cost,
transportation time and increased use of green
energy/technology in India.
Further, India’s efforts in signing successful
comprehensive FTAs have the potential to increase
cross-border trade. Today, India has comprehensive
FTAs with many countries including the United Arab
Emirates (India-UAE CEPA), Japan (India-Japan CEPA),
the Republic of Korea (India-Korea CEPA), Singapore
(India-Singapore Comprehensive Economic Co-operation
Agreement, CECA), Mauritius (India-Mauritius
Comprehensive Economic Co-operation and Partnership
Agreement), and Malaysia (India-Malaysia CECA). 52 In
April 2022, India also signed an interim agreement or early
harvest agreement with Australia (India-Australia
ECTAand is likely to sign one with the UK soon. India
also started negotiations for an FTA with the EU in June
2022.53 India’s FTA with the UAE (India-UAE CEPA),
which was signed in February and came into force in
May, 2022, is expected to almost double bilateral trade
in goods within five years – from the current USD60
billion to USD100 billion by the end of 2027.54 Similarly,
the India-Australia ECTA is also expected to increase
bilateral
49. https://www.economist.com/briefing/2022/05/14/india-is-likely-to-
be- the-worlds-fastest-growing-big-econo my-this-year (last accessed
on June 1, 2022).
50. https://e-vehicleinfo.com/electric-truck-manufacturers-in-india/
#:~:tex- t=Top%20Electric%20Truck%20Ma n (last accessed on
June 1, 2022).
51. https://timesofindia.indiatimes.com/auto/news/tata-motors-
plans- 10-new-electric-vehicles-by-2025/articles
how/83919790.cms (last accessed on June 1, 2022).
52. The details of all FTAs of India are available at Department of
Com- merce, Ministry of Commerce and Industry, Government
of India, https://commerce.gov.in/international-trade/trade-
agreements/ (last accessed on June 1, 2022).
53. https://indianexpress.com/article/explained/explained-india-australia-
interim-trade-agreement-and-fta-7772210/ (last accessed on
June 1, 2022).
trade in goods from current the USD27.5 billion to USD45 age demographics and giant steps towards skill
billion by 2027.55 It is likely that liberalisation of tariffs development; IT driven growth story – a combination of
under these trade agreements and trade facilitation India’s engineering skills, mobile data and a national
measures will make cross-border e-commerce more technology stack, and a structural shift towards
convenient and less expensive. Reduced or eliminated industrialisation with focus on green technologies and
tariffs help lower the cost of goods, be it raw materials or sustainability.
final products, and the focus on SME linkages under the
trade agreements will lead to greater use of e-commerce The express delivery industry has historically grown two to
platforms by SMEs. two-and-a-half times the nominal GDP growth rate. The
increase in economic activity is expected to at least double
Indian small and medium-sized businesses are prioritising
the demand for the B2B and B2C express delivery services.
cross-border trade to thrive in the post-pandemic world.
Economic growth is expected to result in greater express
PayPal’s ‘MSME Digital Readiness Survey’, 2021, shows
movement in domestic as well as international markets.
that 94 per cent of MSMEs are making cross-border trade
Given India’s promising growth trajectory in the future, we
a business priority in India.56
use the upper bound (2.5) multiplier for growth
projections until 2047 (see Figure 4.2).
4.2 Express Delivery Industry Growth Projections The growth projections consider three scenarios as follows:
Given India’s aim to achieve the USD17-trillion GDP • Optimistic (21%): This is consistent with India’s
target by 2047, it will have to aim at a growth of positive growth outlook and the fundamental
around pillars and drivers of change highlighted above. The
7.2 per cent CAGR until 2047 from its current GDP level Government of India’s policy to improve logistics
of around USD3.1 trillion.57 While growth projections by infrastructure, incentives to facilitate industrial
different agencies like IMF, the World Bank, ADB vary, production, and measures to facilitate trade will
they all predicted a fairly high growth for India in the short support the country’s accelerated recovery.
term (until 2023), while NITI Aayog’s implicit projection
• Conservative (18%): In this scenario, we assume a
was 7.2 per cent until 2047 (see Table 4.1).
slightly conservative estimate over the long-term.
Table 4.1 Risks include uncertain global economic conditions,
Different Growth Projections for India
potential new surges in COVID-19 or similar
epidemics, and sharp rises in commodity prices.
Institutions Forecasts (in percentages) • Pessimistic (15%): In this scenario, we assume India’s
NITI Aayog (Implicit) 7.2 (Long term) growth rate due to unforeseen circumstances (such
ADB 8.0 (FY 2023) as the recent case of the COVID-19 pandemic or
World Bank 8.0 (FY 2023) the Russia-Ukraine crisis, which could not be
predicted in earlier growth analysis) continuing for
IMF 8.2 (FY 2023)
a prolonged period (more than three years). Such
Source: Compiled by authors from various sources including ADB, global shocks can lead to an economic slowdown,
WB and IMF as per April 2022.
financial instability, trade (domestic and external)
and supply chain disruptions, particularly of critical
As mentioned earlier, the growth of the express delivery raw materials and final products.
sector will be driven by five pillars pertaining to
infrastructure development under PM Gati Shakti - National Table 4.2
Master Plan for Multi-modal Connectivity and Growth of Indian Express Delivery Industry under
implementation of the National Logistics Policy, 2022, Different Growth Scenarios of the Indian Economy (2047)
demand from rising middle income class in urbanising
cities and towns and rural demand driven by increasing Scenario Growth Forecast for Growth Forecast for
reach and access to markets; working India (in percentages) EDS (in percentages)
Optimistic 8.0 - 8.2 21
55. https://www.opindia.com/2022/04/here-is-how-the-india-australia-
Conservative 7.2 - 7.5 18
trade-agreement-will-benefit-india/#:~:t ext=The%20Indo-Australia%20 Pessimistic 6.0 15
agreement%20is%20expected%20to%20increase%20bilateral,Indi-
an%20g oods%20and%20services%20in%20Australia%20will%20 Source: Calculated by authors from the data provided by
increase (last accessed on June 1, 2022). members of EICI, KIIs and Deloitte (2018).
56. Available at https://newsroom.in.paypal-corp.com/MSME-Digital-Readi-
ness-Survey-2021 (last accessed on June 1, 2022).
57. https://timesofindia.indiatimes.com/business/india-business/india-is-
now-a-3-1-trillion-economy/articlesho w/88761957.cms (last
accessed on June 1, 2022).
Figure 4.2 • Growth in B2C in Tier 2 and 3 cities owing to e-

Express Industry Growth Scenarios
commerce growth, greater penetration of mobiles/
internet and an increase in the middle-class
Express Industry Growth Scenarios
population
• Modal shift to railways for long haul movement. If
= 8.2 % * 2.5 21 Optimistic there is a modal shift from road to rail for delivery
of express consignments, there will be a reduction
in costs and quicker turnaround time for parcel
= 7.2 % * 2.5 18 Conservative delivery. This will benefit consumers and help
• increase the demand for B2C.
= 6.0 % * 2.5 15 Pessimistic The RCS-UDAN will boost low-cost passenger
and commercial movement of goods in Tier 2 and
4.3 Express Industry Growth Projections: Tier 2 cities, boosting B2C growth. Furthermore,
an improvement in air cargo/express airport
B2B and B2C - Scenario Analysis infrastructure at major airports, which meet global
Given the scenarios of overall express industry growth standards and benchmarks, will boost growth (see
(Table 4.2), we look at how the B2B and B2C sub-sectors Figure 4.3).
will grow. Companies involved in manufacturing and • Scenario 2. (B2B growth)
engineering are the key users of B2B express services.
Some of these industries include electronics (original In scenario 2, we assume that the B2B growth will
equipment manufacturers or OEMs), digital goods, auto- increase to more than 20 per cent based on the KIIs. This
components, textiles, pharmaceuticals, medical devices, and growth will come from the following:
industrial engineering. The B2C segment e-commerce is the • There is rapid increase in the export and import of
largest contributor (more than 70 per cent) to the revenue textiles and apparel, pharmaceuticals, engineering,
of the EDS, followed by the banking and financial services automobile components, electronics, etc., owing to
and insurance (BFSI) industry and other document the incentives being provided by the government
deliveries for the education, telecom or government and under PLI scheme, and India’s linkage to regional and
public services sector. global value chains due to increased
The results of our KIIs found that the recent growth of the competitiveness and moving up the value chain.
B2B segment is in the range of 14-16 per cent and of the • There is a modal shift to railways for long haul
B2C segment around 10-12 per cent with overall shares movement. If there is a modal shift from road to
of 77 per cent and 23 per cent respectively (see Table rail for delivery of express consignments, there will
4.3). Considering this as the baseline, we look at the be a reduction in costs and quicker turnaround time
following 4 growth scenarios as shown below: for parcel delivery. This will benefit consumers and
The assumptions for the different scenarios are given in help increase demand for B2B as stated earlier.
Table 4.3 and are explained below. • There is improved connectivity as a result of the
• Scenario 1. (B2C growth) RCS-UDAN which can boost low-cost passenger and
commercial movement of goods in Tier 2 and Tier 2
In scenario 1, we assume that the B2C segment growth cities boosting B2B and B2C growth. Furthermore,
rate will increase to more than 20 per cent based on the an improvement in air cargo/express airport
KIIs. This growth will come from the following: infrastructure at major airports, which meet global
standards and benchmarks will boost growth.
Table 4.3
B2B and B2C – Scenario Analysis
Scenario 1 Scenario 2 Scenario 3 Scenario 4

Projection Scenarios Existing B2C growth B2B growth B2B & B2C growth B2B dip & B2C slight improvement
Segment B2B B2C B2B B2C B2B B2C B2B B2C B2B B2C
Growth 16% 12% 16% 21% 21% 12% 21% 21% 15% 15%
Overall*
15 17 19 21 15
Growth (%)
Source: Calculated by authors from the data provided by members of EICI, KIIs and Deloitte (2018).
• The government removes import and export related Figure 4.3). The overall growth corresponds to the
barriers, including the removal of commodity optimistic growth scenario as laid out in Section 4.2.
restrictions on import and value limit on exports.
Besides, the introduction of a modern regime under • Scenario 4 (lower than expected growth in both B2B
which customs licences are not suspended if there and B2C)
is no wilful default on the part of the carrier,
In this scenario, the following leads to a dip in B2B growth
integration of customs with PGAs and the
and a lower than expected growth in the B2C segment:
addressing shortage of manpower for expedited
clearances are also likely to boost demand (see • The B2B segment growth is tepid because of a
Figure 4.3). dip in the physical movement of official paper and
documents as a result of digitalisation of
• Scenario 3 (B2B and B2C growth)
transactions.
In this scenario, both B2B and B2C experience high growth
• B2C segment may not be able to take off much
due to the factors described above including liberalisation
more than the normal rate of growth owing to
of trade under trade agreements. In this scenario, a
other regulatory barriers including issues with
multitude of factors facilitating external trade including
licence suspension and perishables not being
removal of regulatory hurdles, post-trade agreement
allowed (see Figure 4.3).
liberalisation and growth of trade with key markets like the
UK, the EU, Australia and the UAE, are considered. Along We now turn to the issues that lead to an uncertain
with this, there is domestic market growth, with business environment and can pull down growth of the
companies penetrating Tier 2 and 3 cities and rural areas, Indian EDS sector in Chapter 5.
and network sharing, etc. (see
Figure 4.3
Examples of Some Assumptions for B2B and B2C Growth Rates
High Scenario 1: B2C high Scenario 3: B2B and B2C high growth
• Growth in B2C in Tier 2 and 3 cities: • Growth in B2C in Tier 2 and 3
e-commerce growth; penetration of mobiles/ cities: e-commerce growth;
internet; rising middle income class popula- penetration of mobiles/internet;
tion Rising middle class income
• Volume share of smaller cities in India's • Export and import growth in fashion,
e-commerce market increased to 46 per cent in pharmaceuticals, engineering, automo-
Q4CY20 from 32 per cent year-on-year bile components, electronics, etc. (PLI
(YoY).58 Increased online spending per customer schemes)
YoY • Modal shift to railways for long-
• Modal shift to railways for long- haul movement
haul movement
Scenario 4: B2B dip & B2C low Scenario 2: B2B high

• B2C segment has not been able to take • Export and import growth in fashion,
off much more than the normal rate of pharmaceuticals, engineering, automobile
growth components, electronics, etc. (PLI scheme)
• Regulatory barriers likethe licence • Modal shift to railways for long-
suspension regime, removal of commodi- haul movement
ty restrictions and value restrictions in • Regulatory barriers like licence suspension
exports, continues regime are addressed, there is removal of
commodity and value restrictions on exports,
customs integration with PGAs; adequate
deployment of customs and other regulatory
manpower and technology upgradation to
ensure effective and efficient 24X7 clearance)
Low B2B High
Source: Based on data provided by members of EICI, KIIs and Deloitte (2018).
58. https://retail.economictimes.indiatimes.com/news/industry/e-commerce-growth-in-tier-2-3-cities-outpace-tier-1-indian-cities/82024142 (last accessed 3
October 6, 2022).
5
BARRIERS FACED BY
EXPRESS/ COURIER
COMPANIES IN INDIA
BARRIERS FACED BY EXPRESS/

COURIER COMPANIES IN
INDIA
5
The discussions in the previous chapters show that the integration of domestic and global value chains, the rate of
size of the Indian express delivery services is small growth of the Indian EDS industry and its ability to support
compared to the global industry, but the sector has grown the process of India’s growth, SME integration in domestic
at a rapid CAGR of 15.8 per cent between 2012 and and global value chains and consumer access to different
2020. While the growth of this sector is linked to economic products, etc., will depend on addressing some of the
growth, infrastructure development, technology, growth in issues listed in Table 5.1.
demand and e-commerce, skilling and overall structural
change and
Table 5.1
Barriers Faced by EDS Companies in India
Barriers Nodal Ministry/Department for Facilitation
1. Regulatory Barriers
(a) Courier Imports and Exports (Electronics Clearance)

Regulation, 2010
Restrictions on import of certain commodities
Central Board of Indirect Taxes and Customs (CBIC), Ministry of Finance and
DGFT to make changes in para 2.47 of the Foreign Trade Policy to increase
Value limit restrictions on exports through courier/express Licence suspension and KYC - CBIC, Ministry of Finance
Suspension of licence of authorised couriers pending investigation even when there is no wilful act of non- compliance committed by the authorised co
The authorised couriers are required to verify the KYC of the exporter and then store and present this data to the customs authorities on their behalf.
the courier companies to maintain additional checks
and balances to ensure privacy and authorised use of personal data. The delay in the process leads to consumer dissatisfaction.
Logistics Division, Ministry of Commerce and Industry
need to support and facilitate this.
Barriers
Nodal Ministry/Department for Facilitation
(b) GST Related Barriers

Separate GST registration is needed for each state, undermining the concept of India as a single market or one nation one tax.
Higher penalty amount for transporters than for
GST Council
consignor/consignee, which is discriminatory
Issues with e-way bill – short-term validity, creating
issues for businesses.
2. Infrastructure Related Barriers
(a) Railways
Lack of dedicated freight corridors
Slow movement of trains, lack of secure uploading and downloading facilities in stations, and service quality related to safety and fear of loss of consign
Private participation is only allowed in container transportation, and the express industry is unable to use the services of fast passenger trains
Roll-on-roll-off (Ro-Ro) facility is only available at selected destinations
Ministry of Railways
(b) Road
National/state highways – inadequate capacity, poor riding quality, distressed bridges, lack of by-pass roads and wayside amenities and frequent dacoity in
Ministry of Road Transport and Highways, National
Highways Authority of India (NHAI)
State Department of Transport
(c) Air
Lack of dedicated space for express providers at airport Ministry of Civil Aviation, Directorate General of Civil Aviation (DGCA) and Airpo
Airport operators charge a high price for the movement Logistics Division, Ministry of Commerce and Industry
of shipments from/to AFS GST Council for ATF
High and differential royalty charges
High ATF cost
Requirement for multiple clearances to commission express and cargo terminals - there is no time bound clearance or a single window clearance
Barriers
Nodal Ministry/Department for Facilitation
3. City/Municipal Level Issues
Congested cities and traffic jams

Different timings for entry of express vehicles in different
states
Lack of dedicated parking space for express vehicles
State Department of Transport and Municipal

Corporations
4. Skill Related Barriers
Shortage of skilled manpower/workforce at different

regulatory agencies
Lack of skilling programmes for the EDS sector.
CBIC, Ministry of Finance;
Logistics Division, Ministry of Commerce and Industry;

Central Drugs Standard Control Organisation (CDSCO), Wild Life Crime Control Bureau (WCCB), Food Safety and Standards Authority of India (FSSAI) a
Ministry of Skill Development and Entrepreneurship
5. Technology Related Barriers
Lack of technology integration between ECCS and GSTN/DGFT/SEZ online

Lack of technology integration between Customs
and PGAs
Lack of automatic data capture from GSTN/ICEGATE to ECCS/ICES 1.5
Source: Compiled by authors based on information provided in KIIs.
5.1 Regulatory Barriers: Issues Related to Courier through the EDS mode, remains in the 2010 regulation,
Imports and Exports (Electronics Clearance) although express terminals have been modernised and
Regulation, 2010 they have/can have infrastructure to handle all types of
shipments. There is a need for complete overhaul of the
The express/courier sector is regulated by the Courier regulation to be in tune with modern times.
Imports and Exports (Electronics Clearance) Regulation,
2010,59 which replaced the Courier Imports and Exports • Restriction on Import of Certain Commodities
(Clearance) Regulation, 1998.60 Some of the requirements The Courier Imports and Exports (Electronics Clearance)
in the 1998 regulation like restrictions on the import of Regulation, 2010, restricts shipment that require other
certain commodities (which require a no objection regulatory agency [i.e. partner government agency (PGA)]
certificate (NOC) from allied agencies like the FSSAI or clearances through the express mode. Due to this, many
Drug Controller), critical shipments like blood sample and other clinical
59. The text of the regulation is available at
samples, denture impressions, medicines, drugs and
https://courier.cbic.gov.in/ COURIER-IMPORTS-AND- leather products are restricted for carriage under the
EXPORTS.pdf (last accessed on May 20, 2022). courier mode. During the KIIs, it was pointed out that
60. The text of the regulation is available at https://www.cbic.gov.in/ while the express industry and EICI has invested in state-
htdocs-cbec/customs/cs-act/formatted-htmls/cs-curier-imp-exp-clear- of-art cargo clearing infrastructure and has implemented
ance-dec11 (last accessed on May 20, 2022).
a technology driven
RMS, there are two operational issues – first, the IT Regulations, 2010, the Principal Commissioner of Customs
system of express terminals has not linked customs with or the Commissioner of Customs may revoke the
PGAs, and second, there is inadequate staff in the PGA to registration of an authorised courier and pass an order
clear cargo. However, unless the regulation is for forfeiture of security.61 The conditions under which he
appropriately revised to allow PGAs to do express can suspend the licence is omnibus and there is a
clearances, addressing other gaps such as gaps in the perpetual threat to the continuity of business for express
technology used or the shortages of manpower of the operators and the substantial investment that have gone
PGAs will not benefit the industry. Thus, a combination of into the sector.
factors such as lack of clarity in the regulation, together
with lack of clarity in the process, IT backend connectivity During the KIIs, Indian and international express
gaps between customs and PGAs, and manpower companies pointed out that in India, the suspension of
shortages have accentuated the issue. the licence of authorised courier agents is very often
without prior intimation and without a warning; besides,
On arrival of an express cargo in India, due to the lack of
courier agents are not allowed to present their case. While
a process and regulation to clear it at the express
the companies are required and do maintain a high
terminals, those shipments which needs a no-objection
standard of due diligence, users may sometimes
certificate from PGAs like the FSSAI, Drug Controller,
misdeclare. In such cases, the EDS companies suffer as
WLRO, etc., have to be segregated and transferred to the
their licences could be revoked.
cargo terminal. This causes major delays in clearances.
By allowing the PGAs to clear cargo in express As mentioned in Chapter 2, many countries have a system
terminals and by fast-tracking the customs process, of voluntary declaration, which is missing in India. In India, if
countries like Vietnam have an edge over India in a courier finds non-compliance by the importer or
clearances of cargo for samples like denture imprests, exporter, there is no formal process for voluntary
which are sent from country such as the USA and based disclosure. At times, even after the courier has voluntarily
on that the exporter makes the denture and exports. Thus, disclosed, the courier is penalised. The sudden suspension
our manufacturers also lose out on expedited delivery of of licence without any investigation not only jeopardises
urgently required intermediate goods as well as samples. operations of express companies in India but also greatly
Similar issues are also faced in blood sample testing. affects supply chains and the user industry, both in India
and globally. In addition, this also adversely affects the
• Value Limit on Exports through Courier/Express hard-earned reputation of express companies and the job
In India, there is a value limit of INR5 lakh on exports of security of their workforce, who risk losing their jobs
goods through courier. India is probably the only country suddenly. Frauds have to be identified and addressed; this
where such value restrictions on exports exist (see Table is done globally through proper investigation and action is
2.1). Most importantly, our exporters, especially MSME taken only if guilt is proven. Since India is focusing on
exporters, lose out on expedited delivery due to such improving the ease of doing business and has initiated
restrictions in a highly competitive global market. The user Digital India, customs should be required to provide data
industry felt that this restriction should immediately be and evidence to prove wilful malpractice where the
removed if India wants to facilitate exports since it places express operator is assumed to be actively involved in
Indian express companies and exporters at a disadvantage revenue fraud or regulatory non-compliance. The
vis-à-vis their global competitors. Currently shipments suspension of licences cannot be based on the opinion of
that are not permitted the Principal Commissioner – it needs to be based on
evidence as is the
through courier, use the cargo mode for customs clearance,
which causes delays. without preliminary investigation is a key challenge for
express/ courier companies in India. According to the
The rationale behind this restriction is outdated regulation.
Courier Imports and Exports (Electronic Declaration and
In the year 1998, when the first Courier Regulation came
Processing)
into force, the clearance of courier goods was being done
from passenger terminals. Over the last 25 years, the
Indian EDS industry has made substantial investment in
infrastructure and information technology systems. The
customs clearance of express/courier shipments have
moved from passenger terminals to dedicated express
terminals. Yet the value restriction continues. This is an
example of outdated regulation affecting India’s
competitiveness as well as ease of doing business.
• Suspension of Licences
The suspension of the licence of authorised couriers
61. REGULATION 11. Execution of bond and furnishing of security 3
– (1) The Principal Commissioner of Customs or Commissioner of
Customs, as the case may be, shall require the applicant to enter
into a bond with a security of ten lakhs rupees in case of major
international airports of Mumbai, Delhi, Calcutta and Chennai
and five lakhs rupees in case of other airports in the form of cash
deposit or bank guarantee in the name of the Principal
Commissioner of Customs or Commissioner of Customs, as the
case may be for complying with the provisions of the Act, rules
and regulations made thereunder and the condition of the said
bond shall also be that the applicant shall agree to pay the duty, if
any, not levied or short levied, with interest if applicable on any
goods taken clearance of by the Authorised Courier if in the
opinion of the Assistant Commissioner of Customs or Deputy
Commissioner or Customs the same cannot be recovered from the
importer or the exporter. (2) The Authorised Courier who has
been granted a registration under regulation 10 or who has
intimated in the Form J to the Principal Commissioner of Customs
or Commissioner of Customs, as the case may be having jurisdiction
over the Custom airport from where he has to transact the business,
shall furnish the bond and security as specified under sub-regulation
(1) for each of the Customs airports.
global best practice. The risk is that the actual perpetrator/ occurs in GST registration or faulty GST number/document
wrong doer may get away and continue doing business via is submitted for a consignment in one state, the entire
some other mode or operator, even if the EDS provider’s express vehicle is detained by the GST team. Stopping the
licence is suspended and this needs to be reviewed. There entire vehicle rather than the faulty consignment disrupts
is hardly any provision for the regulator to work with the supply chain. Some states like Kerala detain the faulty
express companies to take appropriate action against a consignment at the carrier’s warehouse and allow the
non- complaint entity. vehicle to be released immediately. This should be
• Requirement to Verify KYC Details followed by all states, and, according to the KIIs, this issue
should be taken up with the GST Council. In addition,
In India, authorised courier companies have to do a KYC there should be harmonisation of audits by different
of their customers to clear consignments through the states. There should be financial alignment between the
customs. According to the Courier Imports and Exports central and state governments.
(Electronic Declaration and Processing) Regulations, 2010,
the authorised couriers are required to verify the KYC Further, the penalty amount is far higher for the
of exporters and then store and present this data to the transporter than the consignor or consignee. For example,
customs authorities on their behalf. The KIIs found that a one-time tax amount as penalty is imposed on the
verification of exporters’ KYC causes a lot of issues as the consignor or consignee but for the same error, the
authorities reject it in case of a slight mismatch. The act of transporter/express company is required to pay 11 times
storing a KYC number further obliges courier companies to the tax amount. This is unfair on the transporter.
maintain additional checks and balances to ensure privacy • E-Way Bill Related Issues
and authorised use of personal data. The delay in the
process leads to consumer dissatisfaction. The key issue is In order to ensure compliance with the GST law, the
that KYC documents are now available online with government implemented the electronic way bill (e-way
government agencies and customs need to ask bill) in April 2018,64 which is an electronically generated
government departments to provide those details rather document mandatory for movement of goods exceeding
than asking the courier companies to provide it. This will the value of INR50,000. The consignor or transporter has
help in better authentication. With data protection to log into the GST network and generate an e-way bill,
requirements and awareness, getting KYC from individual providing the vehicle number from the commencement of
importers has also become a huge challenge. The KYC movement of goods and then continue generating e-way
process needs to be changed to do away with it altogether bills each time a vehicle is changed until the shipment is
for shipments booked by known shippers or ecommerce delivered to the consignee. The validity of an e-way bill
players when the consignee is an individual. Similarly, a depends on the distance travelled by the goods. For less
consignee’s/consignor’s GSTIN can be the proof of the than 100 km, an e-way bill is valid for a day. 65 For every
importer/exporter; the export import code (IEC) can also 100 km thereafter, the validity is an additional one day
be a valid KYC document.62 The Courier Imports and from the relevant date. The express companies pointed
Exports (Electronic Declaration and Processing) that express vehicles often get stuck in tolls or traffic and
Regulations, 2010, needs to be suitably amended or the date for the e-way bill expires. In such cases, the
replaced to align it with developments in other areas. company has to again apply for a new e-way bill, which
leads to delays.
The government also introduced the e-invoicing system to
5.2 Central GST Related Barriers
allow B2B invoices to be authenticated electronically by
In July 2017, the Indian Government implemented the the GSTN for further use on the common GST portal. All
single goods and services tax or GST through the Central invoice information is transferred from the portal,
Goods and Services Act, 2017.63 While GST is supposed to einvoice1.gst.gov. in, to the GST portal and the e-way bill
be a single tax for the entire country, every state has a portal in real time. Therefore, it eliminates the need for
separate GST registration number. Therefore, express manual data entry while filing the GSTR-1 return as well as
companies have to take different GST number for different generation of part-A of the e-way bills. While this is a step
states. Express companies pointed out that the registration in the right direction, the need for e-way bill generation by
process for GST number is different in each state and if the carrier should be done away with since all data
any error elements are present in e-invoicing.
62. For details, see ‘Issue of Custom House Agent License’, Circular
64. The details of the bill is available at https://ewaybillgst.gov.in
No. 09/2010, April 8, 2010, available at
(last accessed on May 20, 2022).
www.ieport.com/2010/customs_ cir/cir-09.htm (last accessed on
July 8, 2022). 65. The “relevant date” shall mean the date on which the e-way bill
63. The text of the Act is available at https://cbic-gst.gov.in/CGST-bill- has been generated and the period of validity shall be counted
e. html (last accessed on July 8, 2022). from the time at which the e-way bill was generated and each day
shall be counted as twenty-four hours.
5.3 Infrastructure Related Barriers as indicated by the higher budget allocation in 2022-23
Transport is a key infrastructure, which contributes around (approximately USD26.04 billion) to the Ministry of Road
Transport and Highways. With the emergence of private
6.3 per cent to India’s GDP.66 This sector helps EDS
players over the last decade, the road construction market
companies establish the link between production and
has become fragmented and competitive. Under the PM
consumption, production and export markets, and imports
Gati Shakti – National Master Plan for Multi-modal
to domestic producers and consumers. While there is a
Connectivity, launched in October 2021, there is increased
strong emphasis by the government on improvement in
focus on improving the quality and capacity of the road
transport infrastructure, there remain gaps in the transport
network to help improve logistics efficiency. National
infrastructure, which are explained below. As mentioned
Logistics Policy, 2022, will further support policy reforms
in Chapter 3, the EDS industry uses both air and road for
to improve efficient movement of goods on commercial
domestic cargo and air transport for international cargo.
vehicles. These will be crucial to address issues relating to
Railways are hardly used for long-haul domestic cargo.
road networks, including long route corridors, last mile
One core issue in infrastructure design and planning is that
connectivity, national highways, state highways, major
consultations are not held with the user industries like the
district roads, rural roads, by pass roads and way-side
express industry to understand their needs.
amenities and safety measures.
• Railways
• Air
India has the world’s fourth largest rail network after the
USA, China, and Russia,67 and the railways account for the While India has been upgrading its airport infrastructure,
second highest percentage of goods moved in terms of there are gaps in planning for air express airport
volume. While the railways account for around 31 per cent infrastructure at major airports, which does not meet
of the entire modal movement across the country (Khatri, global standards and benchmarks, and are inadequate to
2022) for goods, there is hardly any use of this mode by support the growth of the express industry. Even though
express companies. This is because of slow movement of dedicated express facilities are in operation at airports like
trains, lack of secure uploading and downloading facilities Delhi, there is lack of space for expansion. In fact, the
in stations and service quality related to safety and fear of airport and the country also lose since additional freighters
loss of consignment. Freight trains share the same railway cannot be deployed, which would mean lesser economic
infrastructure as passenger trains; therefore, container activity in the country (see Table 5.2). Multi-modal
trains usually have a speed of 25-35 k/hr. In the railways, connectivity to airports is a constraint, which increases
private players are permitted only in container logistics cost and the time taken to reach the end
transportation and the express industry is unable to use customer.
the services of fast- moving passenger trains. The Indian When a cargo lands at an airport, it is taken to the cargo
railways has Ro-Ro68 facility, a combination of road and rail terminal and then cleared by the agent/consignee after
transport, which is only available at selected destinations. paying terminal charges. Alternatively, if an air freight
If railway corridors develop and industry can use the station (AFS) is available, the consignees have the
railways for long-haul delivery, it could be a game flexibility of clearing the cargo at the AFS. While an AFS
changer, especially for the domestic express segment. is created to decongest airport space and lower
However, lack of infrastructure augmentation and process transaction costs, the KIIs found that some airport
improvements inhibit the use of rail as a mode and unless operators charge very high charges for transfer of
infrastructure development is fast tracked, a modal shift in shipments to/from airport from/to an aircraft, almost the
traffic to railways will not take place. same as what a consignee would pay for clearing the
• Road shipment at the cargo terminals. Therefore, consignees do
not use the AFS. Air operators face issues in direct access
India has the second-largest road network in the world, to the ramp and aircraft, which is available in numerous
spanning over 5.8 million km. Over 64.5 per cent of all countries including China and Singapore. The AFS (offsite
goods in the country are transported through roads. There facilities) should be integrated using the services of ground
is a major thrust on road sector infrastructure handling agents at the airport and should not require any
development approvals from cargo terminal operators (CTOs)/airport
operators. An AFS would only need facilitation of
66. https://www.mordorintelligence.com/industry-reports/analysis-of-trans- movement to/from the airport gate to connect to the
portation-industry-in-india#:~:text=India%20has%20witnessed%20 aircraft and this service agreement should be done
112%20completed%20road%20projects%20via,90%25%20of%20
passenger%20traffic%20are%20handled%20by%20road (last accessed between ground handling agencies; CTOs/airport
on May 20, 2022). operators should not have any role in this, according to
67. https://www.ibef.org/industry/indian-railways (last accessed on May the KIIs.
20, 2022).
Other issues that have been raised include issues like
68. Ro-Ro is a concept of carrying road vehicles loaded with various
parking bays not being close to terminals, difficulty in
commodities, on open flat railway wagons.
4
getting
slots, and limited city side and airside terminal
space that does not support the handling of multiple
aircraft simultaneously for speedy deliveries, which is
necessary for express operations.
It was pointed out during the KII that tail-to-tail Civil Aviation Organization’s (ICAO) core principles of ‘cost
transhipment is also a constraint and one of the major relatedness’ and ‘transparency’. In some cases, in India,
factors that impede India’s emergence as a ‘global express royalties are not based on actual cost and is used as a tool
hub’. for ‘rent seeking’ by airport operators.
Express operators are required to make huge investments Multiple clearances are required by the express industry to
to develop the infrastructure for dedicated on-site airport set up operations from different ministries/departments;
facilities. It is important to offer these airport facilities for the process can be cumbersome, lead to delays and
a period of 30 years, considering the huge investments in increase in transaction cost, and take time. For example,
infrastructure required. In addition, lease rentals do not for air terminal (express and cargo), clearances are
come under the ambit of the AERA and are subject to required from government departments such as BCAS,
arbitrary increases. At some airports, lease rentals are Customs and CISF. There is no time bound or single
routed through intermediary entities, which adds to the window clearance.
cost. This is a deterrent for investment in state-of-the-art
express facilities by express operators. In India, the cost of aviation turbine fuel (ATF) is high and
accounts for about 40 per cent of an airline’s direct
The KIIs revealed that airport operators often arbitrarily operating cost. In addition, many international
impose royalty, and the high and differential royalty
organisations are committed to net zero carbon emission
charges increases the transaction cost for traders and by 2050. According to the KIIs, India has not initiated any
adversely affects air cargo volumes. Royalty can account significant steps in the direction of making sustainable
for up to 30- 45 per cent of the cost of outsourced aviation fuel (SAF) available for airline operations.
employees, hiring of equipment or other services availed International airlines operating into India would face a
at the airport in airports like Delhi, Mumbai and smaller challenge in future due to this and that may result in
airports like Guwahati Airport. Unjustified royalties can reduced operations.
go against International
Table 5.2
Comparison of Different Airports of India, Hong Kong and Singapore (As on January 2022)
Type Hong Kong Singapore Delhi Mumbai Bengaluru Madras Airport

International International International International International Airport (Chennai)
Airport Airport Airport Limited Airport Limited
Statistics (2019-20)
Tonnage (Tonne Million) 4.8 2.0 0.96 0.87 0.38 0.36
Number of Passengers (Million) 71.4 68.2 67.3 45.9 32.4 22.3
Aircraft Movement (‘000) 377 363 450 304 230 168
Infrastructure
Runways 3 3 3 2 2 2
Cargo Parking Stands 56 27 12 12 6 3
Free Trade Zone (FTZ) Free Port Yes No No No No
Free Trade Warehousing Zone Yes Yes No No No No
(FTWZ)
Cargo Village/Forwarding Centre Yes Yes Yes No Yes No
Express Facility (Number) 1+CUT 3 3+CUT CUT 3+CUT CUT
Express Facility sq. m 35,000+CUT 86,661 10,400 3788 24,527 1,833
Connectivity
Network Destinations 220 411 144 114 110 77
Operating Airlines 120 126 63 38 45 40
Multimodal connectivity Sea-Air, Sea-Air, DAC-DEL on Domestic Domestic Domestic
Cross-border Cross-border Demand
Truck Truck
Source: Compiled by authors based on information provided by KIIs
Note: (a) CUT means common user terminals (b) one runway in Chennai is not fully operational.
5.4 City/Municipal Level Issues level. As customs and other agencies are integrated
through the use of technology, skilled manpower will help
In India, cities have different timings for the entry of
to make the processes robust and automated, but there
express vehicles, which may have been imposed to reduce
will be a shortage of technical skills unless there is a
peak hour traffic and control pollution levels. For example,
focused training initiative in this area.
in Surat, commercial vehicles are not allowed between 7
am and 11 am and between 5 pm and 11 pm on main
roads and expressways. In Delhi, commercial vehicles 5.6 Technology Related Barriers
cannot enter between 7 am and 11 pm. Express
companies pointed out that they have to pick up goods Customs has introduced the ECCS, which is a robust,
after office hours and have to deliver them in the morning. paperless system for customs clearance that allows online
Such entry timing restrictions causes delays. Besides, in tracking of shipments from the time of arrival into the
some cases, cities have expanded and warehouses are express terminal until departure. However, the ECCS is
inside the cities. During the KII, some express companies not linked to the IT systems of allied clearance agencies
pointed out that given the time sensitivity of express like FSSAI and Drug Controller, making it difficult to have a
consignments, other countries treat express differently robust technology driven RMS. Basically, the Single
from general cargo and there are parking spots in certain Window Interface for Facilitating Trade (SWIFT) is not
cities for express delivery. Some provinces in China allow integrated with ECCS. Similarly, there is lack of technology
express vehicles even during no entry hours as a trade integration between ECCS and GSTN/Directorate General
facilitation method. of Foreign Trade (DGFT)/Special Economic Zone (SEZ)
online and this is needed for data collection and analysis.
Further, there is hardly any use of technology for data
5.5 Skill Related Barriers collection and analysis, which can help in better
While India has one of the largest workforces in the policymaking. While many processes are moving towards
world, there are shortages of manpower in critical roles in digitisation and greener solutions, India still uses lower
government, which cause delays. For example, there standards like pasting security stickers on packages after
seems to be a persistent shortage of customs officers at screening, even when they are not visible, post unitisation,
express terminals even in large airports such as Delhi, during loading into an aircraft. Technology can be used in
Bengaluru and Mumbai. This leads to substantial clearance this area as well.
delays and adversely affects trade volumes, revenue and
growth of express companies in India. Further, there are 5.7 Lack of Level Playing Field with General Cargo
shortages of manpower in allied agencies such as FSSAI,
plant quarantine, drug controller, and animal quarantine, One core issue faced by the EDS sector is the lack of a
which makes it difficult to have back-end integration of level playing field with general cargo. Export shipments in
cargo clearance from customs to these agencies for ECCS have to undergo 100 per cent-X-ray screening by
express cargo. customs, unlike in the case of ICES 1.5 or SEZ, which
The express industry is labour intensive, and the indicates RMS is not being introduced properly. There is
availability of skilled manpower is becoming an issue of no provision for advance assessment of export shipment
concern for this sector. During the KII, express companies filed prior to bringing the shipment to the customs area,
pointed out that the high intensity of work makes the which is available for sea and cargo clearances.
industry relatively unattractive for the labour force. There The following chapter focuses on how the EDS industry
is a shortage of skilled manpower, especially manpower can support India’s journey towards Amrit Kaal and what
skilled in fourth industrial revolution technology and at needs to be done to realise the full potential of this sector.
middle management
6
THE WAY FORWARD – A JOURNEY
TOWARDS AMRIT KAAL – INDIA @
2047
6
THE WAY FORWARD – A
JOURNEY TOWARDS AMRIT
KAAL – INDIA @ 2047
The EDS sector can play a vital role in connecting Indian

industrialisation with focus on green technologies and
SMEs to domestic and global value chains and ensuring
sustainability.
inclusive growth as the country embarks on its journey
towards Amrit Kaal – or India @ 2047. The industry caters The express industry has historically grown between two
to the need for just-in time, fast-track deliveries and has and two-and-a half times the nominal GDP growth rate.
significant backward and forward linkages – from creating The increase in economic activity is expected to at least
jobs to connecting SMEs to the global value chains to double the demand for B2B and B2C express delivery
giving Indian consumer a wide range of products at their services. Growth in economic activity is expected to result
doorsteps. The growth of EDS is related to the growth of in greater express movement in domestic as well as
its user industries and, at the same time, user industries international markets. In this paper, we have presented
benefit from a modern EDS, which can provide just-in-time growth projections for the EDS sector in India under the
door-to-door services, reduce delays and enhance their following three scenarios:
global competitiveness. The growth of cross-border EDS
is related to the removal of barriers to cross-border trade I. Optimistic (21%): This is consistent with India’s
and conducive policy at home. In India, logistics costs are positive growth outlook of 8-8.2 per cent and
higher as compared to costs in China, the USA and the EU. logistics related reforms being implemented along
High costs adversely impact the global competitiveness of with fast-track growth of sectors like manufacturing
Indian industry, especially SMEs. An efficient EDS sector and e-commerce.
can contribute significantly to reducing the logistics cost. II. Conservative (18%): In this scenario, we assume a
While the Indian EDS industry has been growing at a rapid slightly conservative estimate over the long-term.
pace of over 15.8 per cent, the size of this sector is small Risks include uncertain global economic conditions,
in the global context, and the potential is tremendous for potential new surges in COVID-19 or similar
this sector to contribute to inclusive growth. epidemics, and sharp rises in commodity prices.
Of late, India has seen strong support from the This is aligned with India’s growth projection of 7.2-
government towards the development of the logistics 7.5 per cent.
sector, starting with the implementation of the GST, which III. Pessimistic (15%): In this scenario, we
has helped the country move towards a single market. assume India’s growth rate dips to 6 per cent due to
The PM Gati Shakti unforeseen circumstances (such as the recent case
- National Master Plan for Multi-modal Connectivity and of the COVID-19 pandemic or the Russia Ukraine
National Logistics Policy, 2022 are key initiatives that will crisis which could not be predicted in earlier growth
help lower India’s logistics costs as a proportion of its GDP analysis) that continue for a prolonged period
and make its manufacturing more competitive and help (more than three years). Such global shocks can
link it with regional and global value chains. India has fast- lead to an economic slowdown, financial instability,
tracked the process of signing trade agreements with key trade (domestic and external) disruptions and
trading partners, which is expected to remove trade supply chain disruptions in the case of both critical
barriers and increase international trade manifold. raw materials and final products.
The future growth of the express delivery sector will be With the global economy going through difficult times
driven by five pillars pertaining to infrastructure and sudden supply chain disruptions because of factors
development under ‘PM Gati Shakti - National Master Plan such as the COVID-19 pandemic and the Russia-Ukraine
for Multi- modal Connectivity’. These include demand from war, conventional forecasting methodology, in the recent
an increase in the size of the middle income class in years, has not been able to provide stable growth
urbanising cities and towns and demand from rural areas forecasts. The purpose of our study is not to provide a
driven by increasing reach and access to markets, working forecasting model. The purpose is to showcase how the
age demographics and steps towards skill development; IT growth of the EDS sector is linked to the growth of the
driven growth story – a combination of India’s engineering Indian economy, its global linkages and how the growth of
skills, mobile data and a national technology stack, and a this sector can support inclusive growth. The world today
structural shift towards is going through
an extremely uncertain situation due to factors such as the logistics (see Table 2.1 for details). The Courier Imports and
Russian Ukraine war, political changes in many countries
and high inflation, to name a few. In this difficult situation,
India is much better placed than many of our neighbours
in South Asia like Sri Lanka. The country has been a part
of global supply chain resilience initiatives. A robust and
efficient EDS sector will help our businesses play a bigger
role in this value chain. Given this scenario, this chapter
presents some of the recommendation that will help the
Indian EDS industry to be on par with their global
counterparts and support the country’s growth.
6.1 Give Express Delivery a Level Playing

Field with General Cargo
In many areas, the EDS sector does not have a level
playing field with general cargo. Unlike general cargo,
there is a value limit on exports through EDS and
commodities that require an NOC from PGAs are not
allowed through the express mode. More recently, as
mentioned in Section 5.7, while the government has
allowed export of gems and jewellery through EDS, the
process has been made difficult with additional data
requirements. With the growing use of technology for
robust risk management, the processes for cargo
clearances should be similar, whether it is general cargo or
cargo through EDS, or cargo clearance processes in SEZ
vis-à-vis the domestic tariff area (DTA).
6.1.1Remove Value Limit on Exports through EDS
Unlike India, none of our key trading partners have a

value limit on exports through the express delivery
services mode. If Indian exporters have to compete with
exporters from these countries, they need a level playing
field and there should be no value limits on exports.
Similarly, no other country imposes limitations on imports
of products through the express mode, which require an
NOC from the PGAs. This limitation is due to factors like
regulatory gaps, along with the lack of technological
integration among agencies and/or availability of skilled
manpower. Such barriers must be addressed, as India
wants to play a bigger role in global trade. Specifically,
DGFT has to push for the removal of value limits on
exports, in line with global best practices, through its
forthcoming foreign trade policy, following which the CBIC
has immediately to notify it as an amendment to the
Courier Imports and Exports (Electronic Declaration and
Processing) Regulations, 2010.
6.1.2 There should not be any Restrictions on Imports of

Commodities by Express vis-à-vis General Cargo
None of the countries that were looked at to understand

global best practices have restrictions on the import of
select cargo by express while allowing it through general
4
Exports (Electronic Declaration and Processing)
EXPORTS.pdf (last accessed on June 5, 2022).
Regulations, 2010, should be suitably amended to allow
imports of cargo through the express mode, which
require NOC/clearances from PGAs.
6.2 Fast-track Trade Facilitation Related Reforms

In any country, regulations have to be updated from time
to time not only to keep pace with technological progress
and global developments, but also to simplify application
and remove identified issues. Express delivery globally is
a highly competitive industry that operates on the basis
of “minimum government and maximum governance”. With
the implementation of the WTO’s Trade Facilitation
Agreement, countries including India are now adopting
trade facilitation measures like technology-based RMS
paperless trade, and regulations support such
innovations and technological integration. In India’s case,
customs regulation for clearance of cargo through
express/courier mode are outdated. The Courier Imports
and Exports (Electronic Declaration and Processing)
Regulations, 2010,69 needs thorough review and
revisions/amendments in line with global best practices.
India has export potential in food, agriculture and
healthcare products and logistics reforms should
focus on helping exporters send samples and meet
other fast-track delivery needs. Many MSMEs are
onboarding e-commerce platforms for exports, and they
believe that India’s competitive advantage can be
strengthened by enhancing logistics efficacy through the
express mode.
6.3 Implement Voluntary Disclosure to

Provide Operational Certainty and Stability
One of the core examples of lack of a stable and
transparent operating environment is the suspension of
licence of courier/ express companies even before proper
investigation. The licences should be suspended only
after proper investigation and if proven guilty of
regulatory non-compliance. To ensure that the interests
of other stakeholders are secured, customs should have
a process similar to other industry regulators in sectors
like aviation, banking and telecommunication, where
suspension is not resorted to unless investigation is
completed, and the service provider is found guilty.
There should be a proper process and procedure for
suspension of licences, which focuses on the principles of
natural justice. The government could consider imposing
heavy fines on the express company instead of
suspending its licence.
India needs to implement a voluntary disclosure
system as has been done by many countries such as
Singapore, Thailand and the USA (see Figure 2.6 for
details). A fair voluntary disclosure process will give
Indian operators the
69. The text of the regulation is available at

https://courier.cbic.gov.in/ COURIER-IMPORTS-AND-
necessary impetus to partner with customs to improve agreement-between (last accessed on September 9, 2022).
regulatory compliance.
There is also need for greater regulatory consistency and
stability in view of the ongoing trade negotiations with
the EU and the UK and, in the future, possibly with the
USA. India could, for example, take a leaf out of the US-
Mexico-Canada Agreement (USMCA), which was came into
force on July 1, 2020, and substituted the North America
Free Trade Agreement (NAFTA). It contains provisions for
custom penalties70 that can be (i) administered uniformly
across the various ports of entry (ii) result in penalties that
are commensurate with the severity of the breach and (iii)
ensure that clerical or minor error in a customs transaction
will not be treated as a breach of customs laws,
regulations, or procedural requirements, and may be
corrected without assessment of a penalty, unless the
error is part of a consistent pattern of such errors by that
person.
6.4 GST Should be More User

Friendly in a Single Market
While GST has been able to integrate the Indian market,
there should be one single registration for the GST,
instead of the requirement that EDS companies register in
each state. In this context, India can learn from the EU
example of harmonisation, where there is a harmonisation
of excise duties and VAT. EU-based e-retailers have a one-
stop-shop (OSS), an electronic solution, to collect and
remit VAT on sales in other EU member states; which
makes it easy to collect and remit VAT on consumer goods
sold within the EU. A seller can register for OSS in the
local OSS portal. When using the system, they can apply
the VAT rate of the country to which express companies
are shipping the goods and file quarterly VAT reports using
OSS. Goods can move freely across different EU member
states, while taxes are adjusted and tabulated through the
OSS system.
The e-way bill will not be necessary since e-invoicing
has been introduced and data is being collected through e-
invoicing. This is an example how streamlining of
processes can improve efficiency and should be taken up
by the GST Council.
In nearly all states, goods transit has to be accompanied
by significant documentation such as e-way bills, challans,
etc. India should consider introducing a self-declaration
model. In this model, a computerised self-declaration (with
details of the items) can be made available to government
authorities for review. Such self-declaration can be
checked for accuracy using technology for assessment and
sample checks carried out in trucks that are red-flagged to
ensure compliance.
70. The text of the agreement is available at https://ustr.gov/trade-agree-

ments/free-trade-agreements/united-states-mexico-canada-agreement/
In4 countries such as Malaysia and Singapore, all modes
of international transportation of goods, including courier

services, are treated as zero rated supply (see Table
6.1). The government may look at these best practices
and rationalise GST for courier services for international
shipments and accord it the same treatment as other
international transporters of goods; in other words, zero-
rating of international transportation services of goods
may be extended to the EDS sector.
6.5 Transport Infrastructure

Gaps Should be Addressed
In the past few years, the government has implemented
various reforms related to improvements in transport
infrastructure; however, more reforms are needed in
transport infrastructure to facilitate faster and more
reliable transportation of express cargo at lower costs.
• Railways
There should be modal shift from road to rail for
delivery of express consignments, which would reduce
costs and the turnaround time for parcel delivery. The
government is planning to introduce the first semi-high
speed freight train soon; more such high-speed freight
trains should be introduced in a time bound way. These
high-speed freight trains will improve the services of the
EDS industry and help the user industry. Unless the
development of high-speed railway corridors and
connectivity are accelerated, the EDS industry cannot use
this mode of transport in the next five years, losing out
on long-term benefits.
There is a need for secure uploading and downloading
facilities with the same standards as available at airports
for express cargo at railway stations.
Freight trains share the same railway infrastructure as
passenger trains; therefore, the government should
segregate railway lines between passenger and freight
trains. This would result in faster delivery of express
consignments.
The government should encourage private participation
in high-speed trains and dedicated fright corridors and
make available Ro-Ro facility for greater use of this mode
by express companies.
• Road
Although the construction speed of state and national
highways has increased, there should be better traffic
management to control traffic congestions, especially in
cities. Further, there are gaps in road connectivity to
villages and Tier 2 and 3 cities and in remote areas like
the north- east, which need to be addressed. There is
need to plan for adequate driver rest areas, driver safety,
parking, etc., both during and after the construction
stage.
Table 6.1
Global Practices for Treatment of International Transportation of Goods
Country Legal Provision

Malaysia As per Second Schedule: Supply of Services Determined as Zero-Rated Supply of the Goods and Service Tax (Zero-rated Supply)
Order 2014, Transport services in relation to passenger or goods are treated as zero-rated supplies, which includes
a. From a place outside Malaysia to another place outside Malaysia
b. From the last exit point in Malaysia to a place in another country
c. From a place outside Malaysia to the first entry point in Malaysia
Singapore As per Section 21(3) of the Goods and Services Tax Act, 1993, the following services will be construed as ‘international services’,
which may be treated as zero-rated supplies:
a. Services (not being ancillary transport activities such as loading, unloading and handling) comprising the transport of passengers
or goods —
(i)in the case of transport by air or land, where the transportation is:
(A) from a place outside Singapore to another place outside Singapore;
(B) from a place in Singapore to a place outside Singapore; or
(C)from a place outside Singapore to a place in Singapore; and
(ii)in the case of transport by sea, where the transportation is —
(A) from a place outside Singapore to another place outside Singapore; or
(B) from a place in Singapore or to a place in Singapore, and substantially outside Singapore;
UAE Article 45 of the Federal Decree Law No. 8 of 2017 on Value Added Tax provides as under:
‘The Zero rate shall apply to the following Goods and Services:
1. International transport of passengers and goods which starts or ends in the state or passes through its territory,
including transport-related services’
Article 33 of the Cabinet Decision No. 52 of 2017 on the Executive Regulations of the Federal Decree Law No. 8 of 2017 on
Value Added Tax provides as under
‘The supply of international transportation services for passengers and goods and transport-related services shall be subject to
the zero rate in the following cases:
a. Transporting passengers or goods from a place in the State to a place outside the State
b. Transporting passengers or goods from a place outside the State to a place in the State. …
c. Transporting goods from a place in the State to another place in the State if the services are supplied as part, or for the
purpose, of the supply of services of transporting goods either from a place in the State to a place outside the State or
from a place outside the State to a place in the State.’
UK As per VAT Notice 744B, where the place of supply is the UK, zero rating applies to:
• the supply of transport of goods from a place within to a place outside the EU and vice versa
• the transport, handling and storage of goods, when supplied in connection with a journey from the place of importation to
their destination, either within the UK or within another member state (to the extent that those services are supplied in the
UK)
• the transport, handling and storage of goods, when supplied in connection with a journey from their origin, either within
the UK or within another member state to the place of export (to the extent that those services are supplied in the UK).
Source: Compiled by authors from information provided in KIIs; and from legal text of Regulations. Goods and Service Tax (Zero-rated Supply)
Order 2014, Malaysia, available at website of Royal Malaysian Custom Department, www.customs.gov.my/en (last accessed on
September 30, 2022); Goods and Services Tax Act, 1993, Singapore available at https://sso.agc.gov.sg/Act/GSTA1993?ProvIds=P15-#pr21C-
(last accessed on September 30, 2022); Federal Decree Law No. 8 of 2017 on Value Added Tax, UAE, available at
https://legaladviceme.com/legislation/153/ uae-federal-decree-law-8-of-2017-on-value-added-tax (last accessed on September 30, 2022);
and VAT Notice 744B, Government of UK, available at https://www.gov.uk/guidance/vat-on-freight-transport-and-associated-services-
notice-744b (last accessed on September 30, 2022).
Since express delivery services are time sensitive, the • Air

government should remove inter-state restrictions on the
While airports are being upgraded, more upgradation is
movement of express cargo. In addition, in cities, there is
needed. There should be availability of freighter bays close
need for dedicated parking space for EDS, where no other
to terminals, staging areas for ULDs, warehouses with
vehicle can be parked. For the same reason, the restriction
airside and landside access, sufficient landside truck docks,
on entry into city limits during certain hours may be
adequate parking, etc.
reviewed and relaxed for EDS. Like China, India can allow
express vehicles even during no entry hours as a trade EDS companies also recommended that specific cargo
facilitation method. terminal requirements should be included in the Airport
Master Plan with adequate provisions for dedicated USA.73 The Capacity Building Commission through Mission
facilities for integrators and common user terminals. For Karmayogi is already working with various line ministries
better use of space, the government should take to develop and implement capacity building plans. This
necessary measures to decongest express facilities at particular sub-sector in logistics needs to be emphasised
airports. For example, clogged shipments should be and related skill gaps need to be mapped, based on
auctioned, disposed of, or destroyed in a time bound national and international best practices.
manner to facilitate enhanced throughput at express
facilities. The government may look at the training and skill
development models for the EDS sector adopted by
The government should also explore the concept of countries such as Australia, Germany, the Republic of
permitting AFS near airports to facilitate export and import Korea and Singapore.74 In the Republic of Korea, the
clearances. The AFS could help reduce space constraints; government provides incentives in the form of exemption
therefore, the AFS policy, 2015,71 should now be fully from tax levies for companies in return for training
implemented. At the same time, airport operators’ charges workers. Training support is supplemented with
for transfer of shipments to/from airport from/to aircraft, employment insurance that include a job placement
should be rationalised for AFS to take off. Many service service, and unemployment assistance services.75
providers like maintenance and repair organisations will
benefit if AFS are successful.
There is need to focus on aviation infrastructure under the 6.7 Implement Technology for
‘PM Gati Shakti – National Master Plan for Multi-modal Clearances and Data
Connectivity to develop India as a global cargo hub and to Collection
fast-track cargo clearances. In India, the rental lease
tenure for express terminals is 10 years and it does not Technology will be the driver of future growth in the EDS
come under the ambit of AERA. EDS companies sector as in other sectors. Several innovative start-ups
recommended that the facility should be leased directly have come up in this sector. The adoption of technology
from airport operators to express operators for a longer needs to be fast-tracked. Technology-based RMS for
time of 30+ years. advance assessment of export shipments should replace
manual inspections. This will not only lead to reduced
Many express companies recommended during the KII dwell time but also improve the global competitiveness of
that there is a need for time bound, single window EDS exporters. In addition, technology-based RMS and
clearance from different authorities for the express linking the ECCS with allied agencies can help fast-track
industry to reduce transaction cost and save time. cargo clearances. Data collected through the RMS can help
generate a risk score for each operator. The risk score can
be based on different factors such as (i) frequency of high-
6.6 Focus on Skill Development and Training risk assessment of cargo (ii) incidence such as
There is an urgent need to map the current skill shortages misdeclaration, etc. (iii) country of origin or destination
and requirements for 2047 in key government agencies and (iv) past risk score assessment, and EDS operators
such as the customs and PGAs and accordingly, hire or can be categorised into three categories
train officers. The Logistics Division, Ministry of Commerce – ‘Red’, ‘Orange’ and ‘Green’. Based on these scores, customs
and Industry, should work with customs and PGAs like the may undertake more physical inspections of consignments
Central Drugs Standard Control Organization (CDSCO), in the high-risk category. The score, once created, will be
the Wildlife Crime Control Bureau (WCCB) and the FSSAI a continuous data point available to each operator and
to ensure that key PGA officials are present at all ports of most genuine operators will try to be in the low-risk
international trade. Government officials need to be category. Making the criteria public and generating risk
trained in the use of technologies in areas of risk scores and sharing it with operators will allow operators to
management, and EICI and its members can collaborate in take corrective action and help them avoid the risks of
such training with the Logistics Sector Skill Council, sudden suspension of licence, penalties, etc.
customs and PGAs. The government should encourage Customs also need to build a central repository of
more private investment in skill development programmes exporters and importers that is connected to other
for logistics, especially for customs clearances, through government databases like the aadhaar/Permanent
public-private partnerships.72 The government can set the Account Number (PAN)/passport databases to auto verify
curriculum of these training the proof entered
programmes as per global standards such as the EU and the
73. https://www.researchgate.net/publication/345437328_Role_of_Pri-
71. The text of the Policy is available at https://www.civilaviation.gov.in/ vate_Sector_in_Financing_of_Skill_Dev elopment_in_India (last accessed
en/policy-guidelines-air-freight-station-afs (last accessed on July 9, on July 11, 2022).
2022).
72. https://www.researchgate.net/publication/345437328_Role_of_Pri-
vate_Sector_in_Financing_of_Skill_Dev elopment_in_India (last 5
accessed on July 11, 2022).
74. https://www.adb.org/sites/default/files/publication/31137/skills-
development-promising-approaches.pdf (last accessed on July 11,
2022).
75. https://www.adb.org/sites/default/files/publication/31137/skills-
development-promising-approaches.pdf (last accessed on July 11,
2022).
by exporters instead of asking the authorised courier

companies to verify the KYC details of their customers to
6.9 Ensure Liberalisation Commitments
clear consignments through customs. The portal can have under Trade Agreements
a do-it-yourself (DIY) facility, through which exporters can The government has taken the right step to actively
declare shipment details, enter KYC details and select an engage in trade agreements with key export markets.
authorised courier. Once entered, the portal can generate However, trade agreements can only be beneficial if they
a pre-alert and an identification number. With this, the lead to liberalisation commitments. India should bind the
exporter can hand over the cargo to the courier along with existing level of liberalisation in its trade agreements and
this number. This will allow smooth movement of cargo, should be open to undertaking binding commitments in
minimal delays in the process and the KYC data will in the the EDS sector. The trade agreements should foster more
possession of customs. collaborations between foreign and domestic firms and
The technology can also be used to reduce the need for remove barriers to trade in export markets. Commitments
repeated data collection. For example, data submitted in need to cover both market access and non-discriminatory
GSTIN can be used for generating an export shipping bill. treatment by all FTA partners. There should be regular
consultation with the industry on liberalisation prospects
under the trade agreements.
6.8 Make E-commerce a Driver of Future Growth
The e-commerce sector provides great opportunity linking 6.10 Conclusion
MSMEs to domestic and global value chains and
government should have policies that would support the To conclude, policies that provide a competitive
onboarding of Indian MSMEs to e-commerce platforms. In environment and level playing field across different service
its international engagement and trade agreements, India providers and modes of transport along with infrastructure
should be willing to discuss digital trade and how it can development, growth of the economy and demand, and
benefit SMEs’ access to the global market. The adoption of technology will make the EDS industry a key
government also initiated a flagship initiative on e- contributor to India’s growth. If India wants to be a global
commerce, namely, ONDC, which is a network based on leader, the country needs to adopt some of the global best
open protocol and will enable local commerce across practices mentioned in this report to help user industries
segments, such as mobility, grocery, food order and become competitive. The industry too should adopt
delivery, hotel booking and travel, among others. The technology, invest in R&D in areas like green technology
platform aims to create new opportunities by supporting and innovate. International companies should bring their
MSMEs and traders to get onboarded to online platforms.76 global best practices to India. EDS is a network-based
industry and there is scope for all network players,
including different government agencies responsible for
transport, to collaborate through innovative revenue
sharing models. The partnerships can even be between e-
commerce companies, EDS companies and the
government. This report found that, at present, such
partnerships are limited. Cross-industry partnerships and
collaborations along with partnerships between the public
and private sectors with focus on inclusive growth and on
meeting the UN Sustainable Development Goals will help
the development of all sectors and help attain the target of
making India a USD17 trillion economy by 2047.
76. For details see - https://www.ondc.org/index.html (last accessed as on

August 11, 2022); and https://www.business-standard.com/about/
what-is-ondc#collapse (last accessed as on August 11, 2022).
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The ąrowth of domestic and international trade created the need for just-in-time fast-
track deliveries, which led to the ąrowth of the express delivery services (EDS) industry.
The EDS industry provides inteąrated door-to-door transport of documents and products
and plays an important role in connectiną enterprises, especially small and medium
enterprises (SMEs), to the ąlobal value chains. This report presents how EDS can support
India in achieviną its ąrowth tarąets as it embarks upon its journey towards Amrit Kaal
– or India @ 2047. It identifies the reąulatory, infrastructure, technoloąy and manpower
related barriers and makes recommendations on how to develop India as an express
delivery hub, enhance exports, attract investments, create employment and attain hiąh
and inclusive ąrowth.
Excellent Report! There is a need to ease the reąulatory hassles to achieve the milestones, and the riąht approach
is to foreąo the value limits on exports as suąąested by this report.
— Dr John Joseph
Special Secretary (Retd.), Government of India
The express delivery industry unquestionably provides an essential service; its contribution to swift movement of
life saviną medicines, vaccines, etc., has been especially critical duriną the pandemic. Measures already
taken to facilitate this industry are appreciable but these have larąely been ad hoc, piecemeal and time
consuminą. It is imperative Government works closely with EICI on this Vision document to support this industry
and economic ąrowth and also on establishiną a Sinąle Window for comprehensive, coordinated and time-
bound action on all matters – reąulatory, infrastructure, skilliną, etc. This would be a win-win for this vital
industry and all stakeholders, especially the MSMEs.
— Sandeep M. Bhatnaąar
Ex-Member Customs, CBIC
This study lucidly brinąs out various ąrowth drivers, and opportunities from new users and diąital and technoloąical
advances that have been propelliną a faster ąrowth of EDS throuąh road and air transportation in India in the
last decade. Identification of challenąes and barriers in realisiną the Vision for India@2047 entailiną an
annual ąrowth rate of EDS of 18-21 per cent, has been supplemented with actionable recommendations to bridąe
them. Besides national and local-level reąulatory ąaps and overcominą infrastructural and technoloąical
barriers, skill development has also been emphasised. Notably, the study usefully brinąs out siąns of entry of
Indian businesses in international cross-trades and emerąence of competitively-priced Indian rail loną-haul
domestic transportation and trans-continental ąlobal rail systems.
— Vandana Aąąarwal,
Former Senior Economic Adviser, Ministry of Civil Aviation, Government of India
The Work is published by AF Press

in association with Indian Council for
Research on International Economic Relations
(ICRIER), New Delhi.
ISBN 978-93-327-0516-6
ACADEMIC FOUNDATION Indian Council for

NEW DELHI MANESAR Research on
T: +91-11-23245001-04 T: +91-124-4215070-71 International Economic
Relations (ICRIER), New INR 1495 (Ind sub)
email: books@academicfoundation.com
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EXPRESS

INDIAN COUNCIL FOR

ALL RIGHTS RESERVED.

Express Delivery Services - Supporting the Journey towards India@2047

Typeset, printed and bound by PrintShoot, Manesar, Gurugram.

List of Tables, Figures and Boxes........................................................................................................................................VII

2. An Overview of Global Express Delivery Industry..................................................................5

3. Express Delivery Industry in India...............................................................................................................17

4. Growth Projections of EDS Sector under Different Scenarios............................................................................25

5. Barriers Faced by Express/Courier Companies in India.......................................................................33

6. The Way Forward – A Journey towards Amrit Kaal – India @ 2047.....................................................43

Tables 3.1 Revenue of Indian Express Delivery Industry . . . 19

4IR Fourth Industrial Revolution EICI Express Industry Council of India

OEM Original Equipment Manufacturer SCRI Supply Chain Resilience Initiative

The growth of domestic and international trade created

Key Drivers of Future Growth

n E-commerce, Small and Medium Enterprise(SME)/MSME,

Five Pillars with Examples to Support Future Growth

Infrastructure Demand Driver Skilling Technology Structural

Industrial Growth including Shift to Renewables

Scenario GDP Growth Growth of EDS

Optimistic 8-8.2% 21%

Conservative 7.2-7.5% 18%

Regulatory Barriers Addressing Regulatory Gaps

Remove the restriction on imports of commodities through courier mode that re

Multiple documentation requirements

Issues with Electronic Way (e-way) bills – short validity time

Higher penalty amount for transporters as compared to consignor/consignee, which is discriminatory

Ro-Ro facility should be widely available

(b) Road Transport (b) Road connectivity needs a holistic approach

City/Municipal Level Issues

Facilitate Access and Fast-track Goods Movement within Cities

Skill Related Barriers Focus on Skill Development and Training

Technology Related Barriers Make Technology a Key Driver of Growth and

Consignor Pick-Up Local Station (Origin) Country Gateway (Outbound)

Consignee Delivery Local Station (Destination) Country Gateway (Inbound)

Source: Compiled by the Authors.

2.1 Growth by Regions

Key Drivers of Growth of the Express Delivery Industry

Growth in e-commerce, SME/MSME, Logistics development, increase in trade

Source: Based on KIIs.

In recent years, online retail and e-commerce have seen

there were 9.3 billion cross-border orders globally, and 60

2.3.1 Examples of Recent Developments

There have been some key developments within the EDS

It is an on-demand start-up, which offers food delivery services

It offers online grocery delivery services in the USA

It is an on-demand, precision delivery start-up that helps

It is an innovative platform that connects people who need to

Shiprocket; It offers end-to-end services from product packaging to last-mile

4. Trade Global provides a range of services that support online 5. https://sg.finance.yahoo.com/news/singpost-acquires-tradeglobal-hold-

• Digitalisation, Technological Advancement,

2.4 Global Developments and Regulatory Reforms:

EDS Specific No No Yes, at the No No No No No No No No No No

EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS

EXPRESS DELIVERY SERVICES: SUPPORTING THE JOURNEY TOWARDS

Requirement of a Yes Yes No No Yes No Yes No Yes No No No No

Key Features Eligibility Criteria

EXPRESS DELIVERY INDUSTRY

India was one of the fastest growing economies in the

KIIs. It also examines EDS by the different modes of 2 1.7

3.1.1 Contribution of Different Segments:

3.1.2 Share by Different Modes of Transportation