Abstract
1 Executive Summary
India is one of the fastest growing economies of the world today. This growth
is fuelled by growth in infrastructure, booming manufacturing sector, EXIM
trade, retail and agricultural related activities amongst others. Logistics
assumes central activity in these growth areas. In India logistics cost, as a
proportion of GDP, stands today at 13 per cent which is set to rise as the
Indian economy shifts from service oriented economy to that of non-service
activities, like, manufacturing and food-processing etc. Rural logistics is
set to contribute a larger share to this increase as the infrastructure
related to agricultural activity unfolds.
With rising disposable income, changing lifestyle, focus of government and
private sector on rural and agricultural related activities, the rural
logistics has received special attention in the past two to three years. Rural
logistics, though lucrative, has a number of challenges which makes it
difficult to tap the opportunity. Development of cold chain / warehousing
infrastructure, thus, remains at the core of the government' s plan to enable
growth of rural areas, provide employment opportunities for rural youths, meet
India' s growing food demand etc. Similar is the trend in cities which have
witnessed changing lifestyle and shift to consumerism which is further
fuelling national intra-trade activity and thus the logistics sector.
Indian economy is opening up and one recent step in this direction is the
signing of India-ASEAN trade agreement which will likely to push trade through
Eastern Coast of India many folds. The inclusion of India into Nuclear
Suppliers Group (NSG) and civilian nuclear co-operation agreements with USA
and France, and another one in pipeline with Russia is a pre-cursor to the
increase in trade activities with major powers of the world. By 2030, the
economic benefits that will accrue to India' s economy, as a result of the
nuclear trade could touch US $500 billion. Further, the government is
strengthening the infrastructure with over US $70 billion of investment
planned till 2012. Logistics will be one sector which will be the backbone of
flourishing trade activity and infrastructure development, and will receive
special attention by the government / private sector in coming years.
There are a number of activities in the Indian logistics sector which are
broadly classified under ' Hardware' , ' Services' and ' Technology' related
activities, however, not all of these activities are core to the growth of the
sector. Indian logistics sector offers unique opportunities which are mainly
driven by an opening and near double-digit growing economy, and lack of
infrastructure in key areas. It may be noted that although, lack of
infrastructure acts as an inhibitor, but the dearth of adequate infrastructure
also presents unique opportunities to players who are ready for the situation
and understand the market. This report identifies such elements which are
growth engines of the Indian logistics sector and focuses on understanding
opportunities related within these elements.
Identifying strategic logistics elements requires one to understand the supply
chain and value chain, EXIM trade elements and their role, government policies
and subsidies etc to identify the most critical elements. The report begins
with identification of such strategic elements which are then studied in deep
for each element to find market structure, growth drivers, barriers to entry,
rules / government policies applicable to the market, competition threat and
opportunities. Financials are discussed with possible scenarios and their
financial / technical analysis, wherever required.
The report identifies ten such strategic growth areas of Indian logistics sector which includes:
- 1. Air Cargo Logistics
- 2. Cold Chain / Cold Storage
- 3. Custom Bonded Warehouse
- 4. Custom House Agents (CHA)
- 5. Distribution Centre (DC)
- 6. ICD / CFS
- 7. Project Cargo
- 8. Road Transport Service Provider
- 9. Sea Ports
- 10. Warehouse
Containerization and rail based logistics are other major strategic growth
areas of Indian logistics sector and these are studied under various strategic
elements mentioned above, wherever they impact.
The ten strategic elements, mentioned above, are analyzed in detail by
understanding data of each sector collected through credible sources and / or
primary interviews. Financial outlay, technical competency,
return-on-investment, competition analysis and difficulty of implementation
are some of the main parameters which will further help identify the right
opportunity and rank them through an ' Opportunity Matrix' . These are some of
the external parameters that need to be mapped with internal strengths,
capabilities and tie-ups or collaborations of an organization to arrive at the
most compelling opportunity to pursue. These are largely a function of each
company and the report, therefore, analyzes opportunity on the basis of
external factors on a macro level with specific illustration of state / city
level logistics activities to provide appropriate insights and analyze
scenarios.
This report is one step ahead in understanding the strategic elements of
Indian logistics sector as it delves into each strategic element and
identifies opportunities, rather than skimming over the logistics scenario by
reporting facts, figures and new developments.
The report provides insights which can be used to understand the sector and
directly assess a particular sector opportunity.
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