For those seeking employment or entrepreneurial ideas, logistics is a lucrative option in India. The logistics sector is booming now thanks to a combination of factors like digitisation, government policies, and the rising significance of e-commerce. In India, the logistics sector contributes about 14.4% of the GDP.
The budget for 2022 allocated significant funds towards strengthening the sector in various ways. The government has also devised a multi-pronged strategy to boost the $150-million-dollar sector.
The Logistics Master Plan is a geographical initiative through which multiple projects will be integrated to strengthen the intermodal and/or multimodal transportation network in India. Construction of relevant infrastructure (such as gas and utility pipelines, optical fibre cable networks, etc.) will be planned in coordination so as to avoid disruptions between departmental works.
There is a proposal to introduce a National Logistics Policy that can transform India into a global contender in the logistics sector. The policy envisions building a seamless and cost-effective logistics ecosystem that employs the latest tools, streamlined procedures, and qualified personnel. Such a move could increase employment opportunities for MSMEs. NLP also aims to reduce the cost of the sector, which forms 14% of the GDP as of 2022. The policy seeks to bring the cost down to 9-10% of the GDP in the future.
A major step by the government is the drafting of the National Logistics Law. The law is presently under consultation. By establishing a unified legal framework, the regulatory environment (single bill of lading across modes) will be flexible and well-organised. The law will also smooth out long registration processes by assigning a unique logistics account number to each operator.
Budget 2022 has also introduced the Unified Logistics Interface Platform (ULIP). All mode operators will be brought under an integrated, digitised platform. ULIP will be instrumental in maintaining just-in-time inventory management without complex documentation. The government has also proposed the establishment of 35 new multimodal logistics parks across India. New logistics hubs are to be set up in Tier-II and Tier-III cities as well.
In addition to building infrastructure, the government also aims to develop a qualified workforce. Presently, 90% of the logistics sector comprises an unorganised workforce, such as small fleet owners, brokers, small-scale warehouse owners, freight forwarders, and the gig workforce. The National Logistics Workforce Strategy is proposed by the government to facilitate the integrated skill development of personnel in the logistics sector.
Thanks to the implementation of digitisation, India has grown exponentially in financial technology. Digital India has tasted clear success through UPI. Digital payment has enabled massive transformations in business for consumers as well as logistics suppliers. The latest tech platforms have played a role in setting up an on-demand, intra-city, last-mile logistics model. Through technological innovations, the last-mile logistics model has proven to be a boon for both the customer and the transporter, who save time and money.
Simultaneously, there has been a huge rise in employment opportunities due to the growing preference for e-commerce ventures. On-demand consumerism has directly shaped the logistics industry. There is an increase in entrepreneurial options, as now there are dark stores, gigs based on two-wheeler mobility, tech platforms for tracking, payments, etc., that play significant roles in the e-commerce ecosystem. Direct-to-consumer commerce is good news for the growth of small enterprises, as they can now reach their target clientele directly to sell their products.
India’s logistics sector is predicted to reach $380 billion by 2025, making it the best industry to be in right now.