India on the move

India’s logistics sector is undergoing a paradigm shift towards multimodal systems, powering efficiency, sustainability, and global competitiveness.

- PANKAJ KUMAR

India is currently witnessing a significant change in its logistics ecosystem, transitioning from the conventional use of unimodal transport systems to a more efficient and interconnected multimodal system. Historically, goods used to be transported through a single mode, typically road or rail, for the entire journey. Today, the focus has shifted towards multimodal logistics systems. These systems involve the integration of various modes of transportation such as road, rail, air, and waterways all managed under one contract by a Multimodal Transport Operator (MTO).

This shift is indispensable for advancing the country's development goals under the 'Viksit Bharat' initiative and establishing its global logistics competitiveness. Spurred by developments in technology, better infrastructure, public-private partnership, and policy-driven reforms, logistics isn't a background function anymore but as a pivotal enabler of the nation's $5 trillion economy vision.

Economic significance of logistics sector

Cost to GDP: India’s logistics sector, despite its high cost to GDP (13 per cent compared to global 8-9 per cent), is a vital economic growth engine. It’s estimated to reach ₹35.3 trillion by FY2029, growing 11 per cent annually.

Employment generation: The sector provides jobs to over 22 million workers across warehousing, transport, and logistics technologies. Recent governance reforms like GST and digitalisation have formalised jobs and endorsed skill development.

Support for manufacturing and trade: Furthermore, efficient logistics complements manufacturing and trade, supporting initiatives like ‘Make in India’ and Production Linked Incentive schemes by reducing costs, improving turnaround times, and enhancing export competitiveness.

Understanding multimodal logistics: Strategies and advantages