India's Logistics Sector Likely To Grow 8 Pc Annually To $362 Billion By FY30

(MENAFN- IANS) New Delhi, April 17 (IANS) India's logistics sector is projected to touch $362 billion by FY30 from $246 billion in FY25, growing at a CAGR of 8 per cent over rising consumption, expanding trade, as well as cost optimisation and efficiency gains from key government schemes, a report said on Friday.

The report from Brickwork Ratings projected freight volume to exceed 7,100 million tonnes by FY30 from roughly 5,000 tonnes in FY24, at a CAGR of 6.1 per cent.

“Manufacturing, construction, e-commerce, and retail are the major drivers of this growth in terms of freight volume. Specifically, the express logistics segment is projected to grow by 14 per cent, making it a key catalyst for the industry,” said Manu Sehgal, CEO, Brickwork Ratings.

Manufacturing led the end-use segments among logistic sectors with 18 per cent market share in FY25, driven by strong industrial production, auto or pharma advancements, and export demand.

Meanwhile, warehousing and supply chain services are the fastest-growing value chain layer, supported by increasing investments and GST-led formalisation of the organised market.

West India led the growth with 35 per cent share, driven by Mumbai's financial prominence, major ports, strong industrial base in Gujarat, industrial hubs and corridors.

North India followed with around 30 per cent, benefiting from strategic transit positioning, robust infrastructure, and key hubs like Delhi-NCR.

South India accounted for approximately 25 per cent, supported by port infrastructure, IT-driven cities, and manufacturing activity.

East India posted a 10 per cent share, but the share is sharply growing, aided by port-led trade, improving connectivity, and its strategic gateway position to the Northeast and neighbouring countries.

India's logistics cost of 8 per cent of GDP is comparable to South Korea (8 per cent), USA (8 per cent), and Europe (9 per cent) far lower than China's logistics cost estimated at roughly 14 per cent in 2023.

Initiatives such as Dedicated Freight Corridors and PM Gati Shakti are aimed at reducing logistics costs further. India's logistics ecosystem is dominated by road transport, accounting for 65 per cent market share, while rail currently handles 31 per cent of freight.

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