Logistics is the framework of all other industries in an economy. According to The Economic Times, ‘The Indian economy is the fifth largest in the world, and we have our sights set on becoming a $5 trillion economy by 2025.’ One of the main reasons behind this growth is the expansion of logistics industries. In every market, whether it be in manufacturing, e-commerce, or the medical, agricultural, or transportation industries, logistics plays a significant role.
How does the logistics industry contribute to the growth of India’s economy?
1. Infrastructure Development
Logistics firms construct infrastructure, such as warehouses, transportation facilities, and technological systems, to efficiently transfer goods and services across national borders. Furthermore, the infrastructure overall is being improved through logistics industries’ investments in transportation infrastructures like roads, railroads, and ports. Increasing supply chain efficiency and lowering logistics costs contribute to developing the country’s economy.
2. Cost reduction
The means of transportation are indeed developed by logistics firms, which lowers the cost of transportation. As a result, goods gradually become less expensive overall, which benefits consumers. Due to reduced transportation, warehousing, and inventory costs, Indian products have become more competitive in the world market.
3. Employment generation
The growing logistics industry contributes to resolving unemployment in the economy by creating thousands of job opportunities for the educated and non-educated. These jobs may include truck drivers, port labourers, warehouse managers, logistics supervisors, etc. Less unemployment, the more the standard of living of the people in the economy will increase.
4. Promoting domestic consumption
Whether it be from city to city or state to state, the flow of goods is streamlined all over India. This helps both the business and the people to access a wide range of products within the domestic markets of India. Here, the logistics industry is contributing to the growth of domestic consumption.
5. Boosting exports
Logistics Industry acts as the connecting bridge for the goods in the country to be exported to foreign countries. They support businesses in meeting standards, providing access to global markets, and guaranteeing quick product delivery. Through increased exports, the Indian markets can expand their customers count and reach new markets at the International level. This has a beneficial impact on the country’s earnings from foreign exchange and contributes to India’s economic growth.
What will be the future of the Logistics industry in India?
From advancements in technology and shifting consumer behaviour to significant improvements in infrastructure, these key trends are set to shape the future of logistics in India for years to come.
According to research conducted, “India E-commerce Logistics Market Performance and Future Forecast to 2027,” the Indian logistics market is anticipated to expand in size at a CAGR of 5% from 2022 to 2027, bringing in USD 633.6 billion. Below are a few future trends in the logistics industry in India.
National Logistics Policy in the long run
The National Logistics Policy implemented in India has the ability to increase trade both domestically and internationally. Lowering prices, increasing efficiency, and utilising more technology will boost India’s logistics sector’s competitiveness as it integrates multiple logistical services and builds a smooth supply chain network.
Future efforts to increase digitalisation
The adoption of digitisation has reached its peak in recent years as firms have realised the value of embracing an electronic supply chain ecosystem for business expansion. The supply chain process will be improved, mobilised, and made more resilient with the successful digitisation of logistics industries.
Green Logistics to the rescue
Green Logistics practices are intended to reduce the harmful effects of industrial operations on the environment. As industries work to decrease their carbon footprint, pollution, and waste, environmental consciousness is being focused on. Industries are taking steps to reduce trash and energy use in their operations, including using electric vehicles, promoting pick-up sites, and using biodegradable products.
The logistics industry plays a crucial role in driving the growth of India’s economy. As said before, it’s the framework of all other sectors in the country. By creating job opportunities, fostering foreign investment, generating national income, and speeding up economic progress, logistics companies in India significantly contribute to the macroeconomic stability of the country’s economy.
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