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Robust Infrastructure: Key to the Growth of the Logistics Sector

Robust Infrastructure: Key to the Growth of the Logistics Sector

Logistics infrastructure in India

A viable and robust logistics sector is one of the leading drivers of the Indian economy. However, the success of the logistics sector is largely dependent on efficient infrastructure like roads, ports, highways, logistics parks in India among others. In 2018, the value of the Indian logistics sector was estimated at around US$ 160 billion.

A report that was recently published by JLL Industrial Services Research lists the dependence of the Indian logistics sector upon the road infrastructure. The report, which was published at the CILT India Expo 2019 and is titled India: Evolution of Integrated logistics – Aiming transformation Through PAGI, states that the Indian logistics sector, which has many stakeholders, is extensively spread across the country. Roads in India account for around 60 percent of the transportation. This is much higher than the global average which is between 30 and 40 percent.

To use the roads to their maximum potential, it is important that attention should be paid to the construction of specialized storage space and advanced hinterland infrastructure across the length and breadth of the country. Roads also play a pivotal role in effectively connecting the manufacturing centres with both the warehouses and the consumers. In recent times, the warehouse segment, which is one of the most crucial segments of the Indian logistics infrastructure, has attracted the interests of investors, both foreign and domestic.

To attract more investment in the logistics infrastructure, the government of India is working on a comprehensive investment plan for airport, ports, rail and other forms of infrastructure. In the next five years, it is estimated that the investment outlay will be close to Rs 100 lakh crores.

Other than the massive investments, the government has also undertaken several initiatives for the development of the logistics sector. Bharatmala and Sagarmala are centrally funded projects aimed to enhance the road infrastructure and logistic sector. The two projects comprise an investment of approximately US$ 220 billion. The Golden Quadrilateral is another government initiative that has witnessed the development of road connectivity to a great extent.

The role of the railway network, which is referred to as the nation’s lifeline, is crucial in the development of the logistics sector. The Dedicated Freight Corridor Project is one of the major initiatives of the Indian government. Apart from decongesting the road network, the Dedicated Freight Corridor will significantly reduce the freight transit times. The setting up of logistics parks in proximity to the corridor will fuel the growth of the economy and lead to employment opportunities for the people.

India is fast emerging as a leader in the drone ecosystem and is planning to make use of this technology in the development of the logistics sector. The successful implementation of the Drones Policy 2.0 draft will ensure the establishment of Droneports and Dedicated Drone Corridors, thereby, vastly improving the logistics infrastructure in India. Other than this, the sector will also get an impetus with the implementation of the National Logistics Policy.

The Indian logistics sector is witnessing expansion, thanks to the initiatives of the government. An efficient and well maintained infrastructure will give further boost the sector, thereby, leading to a growth in the economy.

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